UNEMPLOYMENT 

PROBLEM 


ause  and  Cure 


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THE 


UNEMPLOYMENT 

PROBLEM 

Cause  and  Cure 


By 


t  }•  l 


Published  by 

THE  SOCIOLOGY  CLUB 

Schenectady,  N.  Y. 


PREFACE 

(By  Author.) 


“This  book  is  more  than  necessary ;  it  is  urgent.  I  pub¬ 
lish  it.” 


VICTOR  HUGO. 


PREFACE 

(By  the  Sociology  Club.) 

These  lectures  were  delivered  to  the  Sociology  Club. 
The  Club  spent  over  twenty  sessions  in  studying  them,  and 
has  now  undertaken  to  publish  them  with  the  permission  o£ 
the  author. 

W.  S.  VAN  VALKENBURGH, 

Secretary  Sociology  Club, 

Schenectady,  N.  Y. 


July  24,  1916. 


DEDICATION 


I  dedicate  this  book  to  the  American  Slave  Citizen,  who 
no  longer  fancies  himself  free,  but  who  has  become  conscious 
of  his  slavery  and  aspires  to  be  free. 


ANALYTICUS. 


For  corrections  of  important  errors 
See  Errata  on  the  last  page  ot 
this  book. 


Copyright,  1916 

BY  THE  SOCIOLOGY  CLUB 


THE  UNEMPLOYMENT  PROBLEM 

CAUSE  AND  CURE 


LECTURE  1. 
Theory  of  Unemployment. 


“Come  now,  and  let  us  reason  together.” — Isaiah:  1-18. 

1.  The  unemployment  problem  is  one  of  the  most  im¬ 
portant  problems  that  confronts  the  statesman,  the  reformer 
and  the  economist  to-day.  It  is  at  the  root  of  tariff  question ; 
it  is  at  the  root  of  Socialism,  anarchism,  and  industrial  syndi¬ 
calism  ;  it  is  at  the  root  of  low-wage  and  high  cost  of  living;  it 
is  at  the  root  of  labor  unions,  strikes,  trusts,  labor  laws,  and 
anti-trust  laws ;  it  is  at  the  root  of  troubles  in  Morocco,  Trans¬ 
vaal,  India,  and  China.  -In  short,  i.t  pervades  the  whole  of 
modern  politics,  and  social  science. 

2.  The  treatment  of  the  unemployment  problem  in  the 
past  has  been  far  from  Satisfactory.  The  subject  has  to  be 
studied  in  its  two  aspects,  the  theoretical  and  the  practical;  it 

1.  As  an  illustration  of  the  careless  way  of  dealing  with  this  im¬ 
portant  problem,  I  quote  the  following  from  “Unemployment  and 
Wage-Earner,”  by  John  Mitchell: 

I.  “For  a  century  this  government  possessed  in  its  unappro¬ 

priated  natural  resources,  an  ever-reliable  absorber  of  labor  seeking 
employment.  These  resources  no  longer  perform  that  function 
directly,  except  in  a  limited  decree.  We  have  arrived  at  that  state,  in 
which  social  actions  in  some  form  must  to  an  extent  take  the  place 
cf  individual  effort . 

II.  “Well,  what  con  be  done  for  our  unemployed?  Alas,  it  is  in 
the  end  one  of  the  deepest  questions  confronting  our  government. 
Immediately  in  the  United  States,  effective  and  to  a  point  continuous 
relief  to  our  over-stocked  labor  market,  is  to  be  found  in  persisting  in 
American  principles, -under  which  the  wage  earner  is  an  independent 
citizen,  rather  than  in  trying  to  follow  the  European  examples,  by 
which  the  wage-earners  are  regarded  the  wards  of  society.” 

Can  any  American  undertake  to  harmonize  the  above  two  passages? 


the:  unemployment  problem 


has  also  to  be  studied  from  two  points  of  view,  the  ethical  and 
the  economical.  The  treatment  of  the  problem  in  the  past  has 
been  limited  to  its  practical  economic  aspect,  and  it  is  no  won¬ 
der  that  the  results  have  been  so  unsatisfactory.  Our  first 
step  ought  to  be,  to  frame  and  establish  a  correct  theory  oi 
unemployment;  the  remedy  if  any  will  then, naturally  suggest 
itself.  If  it  does  not,  the  chances  are  that  there  is  no  possible 
remedy,  and  that  things  will  have  to  be  allowed  to  go  on  as 
heretofore.  There  was  a  time  when  people  were  trying  to  gel 
perpetual  motion,  but  theory  of  mechanics  has  uttered  its  ver¬ 
dict  on  this  point,  and  no  sensible  person  dreams  of  perpetua 
motion  now.  Theory  has  led  the  way  to  our  modern  system 
of  wireless  telegraphy ;  before  the  theory  of  electric  waves  was 
developed,  attempts  were  being'  made  to  get  wireless  com¬ 
munication  in  other  ways,  but  in  the  absence  of  theory  those 
efforts  were  naturally  misdirected  and  could  not  lead  to  sue 
cess.  If  unemployment  be  a  necessary  evil,  2incapable  o 
being  remedied,  as  some  writers  believe,  it  is  best  for  us  tc 
know  it;  it  would  save  us  from  many  a  wild-goose  chase  ir 
search  of  an  impossible  scheme  of  reform.  On  the  contran 
if  reform  be  Possible,  theory  will  show  in  what  direction  tc 
look  for  it.  Therefore  before  taking  any  important  practica 
step,  it  is  our  duty  to  do  a  little  hard  and  systematic  3analvtica 
thinking  and  to  formulate  if  possible  a  scientific  theory  of  un 
employment. 


2  No  one  theory  as  to  the  cause  of  trade  fluctuations  can  yet  b< 

taken  as  proved . whatever,  however,  the  explanation  to  be  finally 

adopted,  there  seems  now  some  reason  in  theory  for  regarding  th< 
fluctuation  as  inevitable,  or  at  least  preventable  only  at  the  cost  o 

greater  harm . whatever  the  cause  or  causes,  they  must  be  deer 

seated. — Beveridge,  “Unemployment,  a  Problem  of  Industry,”  secom 
edition  1910,  page  64. 

3.  “We  need  to  do  a  great  deal  more  hard  thinking  in  almos 

every  department  of  our  Socialistic  program .  Take  for  instanc< 

the  pressing  question  of  the  unemployed .  It  is  easy  enough  t( 

demand  that  something  should  be  done  and  I  entirely  agree  witl 
agitating  the  subject,  but  something  more  than  agitation  is  required 
It  is  of  no  use  urging  remedies  which  can  be  demonstrably  prove( 
to  be  worse  for  the  patient  than  the  disease  itself.  I  fear  that  if  w< 
were  to  be  given  full  power  to-morrow  to  deal  with  the  unemployec 
all  over  England,  we  should  find  ourselves  hard  put  to  it  to  solvi 
the  problem.” — Sydney  Webb,  “The  Basis  and  Policy  of  Socialism,1 
page  52. 


LECTURE  I— THEORY  OF  UNEMPLOYMENT. 


7 


3.  The  most  commonly  accepted  theory  is,  that  there  is 
not  work  enough  in  the;  world  to  go  round  for  all.  There 
seems  to  be  a  notion,  prevalent  among  the  economists,  and 
also  among  the  people  generally,  that  the  amount  of  work 
available  for  the  people  of  any  country  is  a  sort  of  fixed  and 
limited  quantity,  depending  in  some  way,  not  clearly  under¬ 
stood,  upon  the  natural  resources  of  the  4country.  This  work 
is  not  enough  to  go  round  for  all,  and  therefore  a  frantic  effort 
to  get  a  proper  share  is  everybody's  duty,  and  an  effort  to 
put  more  than  one's  share  is  not  only  desirable,  and  justifiable, 
but  even  praiseworthy.  According  to  this  theory  the  unem¬ 
ployed  are  those  who  cannot  hold  their  own  in  the  struggle 
for  work.  In  the  course  of  this  struggle,  a  considerable  part 
of  work  must  necessarily  be  lost,  but  this  loss  is  regarded  as 
inevitable.  Now,  if  this  theory  be  true,  if  there  be  a  real 
scarcity  of  work,  and  if  it  be  necessary  for  every  person  to 
have  a  fair  share  of  it,  would  it  not  be  highly  desirable  to  cease 
fighting,  and  by  common  consent  to  frame  and  enforce  a  code 
of  rules  for  the  fair  and  equitable  distribution  of  work  to  5all  ? 
Would  any  people  allow  a  similar  policy  of  competitive  strug¬ 
gle  in  a  siege,  where  water  was  scarce,  so .  as  to  let  half  the 
water  be  wasted  bv  fighting  over  it.  in  order  that  one  man  may 
get  a  hundred  gallons,  and  a  hundred  men  might  get  none? 
If,  on  the  other  hand,  the  theory  be  untrue,  and  if  the  amount 
of  work  be  unlimited,  there  should  be  no  need  of  any  struggle 
at  all,  so  that  in  either  case  there  is  no  justification  for  the 
struggle,  fight  and  competition.  But  competition  for  work, 
and  consequent  unemployment,  is  a  fact  and  has  to  be  ex¬ 
plained. 


4.  The  anti-capitalists  attribute  competition  for  work 

4.  .'“One  must  recognize  that  there  Is  a  limit  to  any  country’s 
capacity  to  furnish  work  and  that  the  limit  has  been  reached  in  this 
land.” — Prof.  J.  J.  Stevenson. 

5.  The  idea  of  equitable  distribution  of  work  through  legislative 
intervention  is  supported  by  the  labor  unions  and  the  Socialists. 

“A  SHORTER  WORKDAY,”  suggested  by  organized  labor  for 
many  years  as  one  method  of  easing  the  pressure  of  unemployment 
by  distributing  it,  has  been  adopted  to  some  extent  by  employers 

during  this  year .  It  would  necessitate  the  employment  of  a 

larger  number  of  men  to  do  the  work . thus  decreasing  the  number 

of  men  out  of  work.” — “Menace  of  Employment,”  Winfield  Gaylord 


8 


the:  unemployment  problem. 


and  unemployment,  to  the  greed  of  the  capitalist,  to  his  hav¬ 
ing  monopolized  implements  of  work,  leaving  only  a  few  ap¬ 
proaches  to  work  open  to  the  whole  working  force,  thereby 
compelling  them  to  fight  and  struggle  for  a  chance.  But  is  the 
capitalist  really  more  greed}^  than  the  •  wage-worker,  whom 
he  is  supposed  to  drive  into  competition  with  other  workers? 
liow  could  you  explain  the  millions  he  gives  away  freely  for 
various  charitable  purposes  if  greed  be  his  dominant  motive? 
Why  should  Rockefeller  have  given  25  millions  to  the  Chicago 
University,  when  the  Chicago  University  gave  him  not  one 
cent  in  return?  That  25  millions  is  only  a  fortieth  part  of  his 
enormous  wealth  is  no  answer  to  my  question.  Even  to  a 
multi-millionaire  25  millions  is  not  a  small  sum  to  give  away. 
There  are  instances  where  even  this  explanation  fails.  In  anti¬ 
capitalist  literature  Carnegie  is  pictured  as  the  personification 
of  greed  and  avarice,  and  yet  it  is  fairly  well  known  that  he 
has  already  given  away  more  than  half  his  fortune  in  the  ser¬ 
vice  of  education.  Leland  Stanford  dedicated  his  entire  fortune 
for  the  same  purpose.  Here  the  greed  theory  completely 
breaks  down,  for,  in  these  two  instances,  which  are  by  no 
means  rare  exceptions,  there  runs  the  strange  anomaly  of  those 
against  whom  a  weapon  is  being  forged,  contributing  deliber¬ 
ately  to  its  manufacture.  The  watchword  of  the  revolutionist 
is  education;  the  revolutionist  should  be  the  last  of  the  race 
to  impugn  the  motives  of  the  philanthropic  capitalist  who  aids 
him  in  his  cause.  I  do  not  imply  that  these  endowments  were 
made  without  a  motive.  No  human  act  is  ever  without  motive. 
My  contention  is  that  greed  is  not  the  motive  and  in  some  cases 
not  even  a  motive  of  the  capitalist.  "Save,  save:  accumulate, 
accumulate,  saving  for  saving's  sake,  accumulate  for  accumula¬ 
tion's  sake.  This  is  Moses  and  the  Prophets" — may  be  very 
fine  rhetoric,  but  it  is  very  poor  logic.  Hvpocrisy  is  often  sug¬ 
gested  as  an  explanation  of  such  gifts.  Hypocrisy  may  be  de¬ 
fined  as  preaching  virtue  without  practicing  it.  When  hvpo¬ 
crisy  starts  practicing  virtue  it  ceases  to  be  hypocrisv.  The 
following  is  an  extract  from  the  Boston  American,  which  is  not 
generally  and  never  consistently  a  friend  of  capitalists: 

"In  the  United  States  victims  die  every  year  and 
month  of  phossy  jaw,  because  the  cheapest  way  of 
making  matches  is  the  way  that  causes  the  disease. 


LECTURE  I— THEORY  OF  UNEMPLOYMENT. 


9 


But  a  way  of  making  matches  entirely  free  from  dan¬ 
ger  exists.  This  method — patented — was  controlled 
by  the  Match  Trust.  That  trust  has  freely  cancelled 
its  patent  so  that  anybody  might  manufacture 
matches  without  murdering  men  in  the  process,  a  very 
creditable  act.  But  still  the  manufacture  of  poison¬ 
ous  matches  and  manufacture  of  dreadful  disease 
goes  on— FOR  PROFIT.” 

In  the  original  article  the  words  “for  Profit”  were  em¬ 
phasized  to  the  fullest  extent  of  the  form,  size  and  character 
of  type  available.  The  editor  believes  that  greed  of  profit  is 
the  guiding  star  of  the  capitalist.  Can  he  explain  how  the 
match  trust  has  chanced  to  rise  above  this  passion  and  has 
undergone  this  great  sacrifice  in  the  interest  of  its  rivals? 
Assuming  that  the  capitalist  is  greedy,  the  next  question  is 
what  makes  him  so  greedy?  Assuming  once  more  that  he  is 
greedy,  why  does  he  block  the  way  of  the  workman  so  effect¬ 
ively  as  to  keep  some  of  the  workers  unemployed  and  unpro¬ 
ductive,  thereby  preventing  in  part  the  production  of  wealth 
when  the  production  of  wealth  without  limit,  is  the  only  pos¬ 
sible  way  to  fulfill  the  dictates  of  his  greed?  A  complete  and 
correct  theory  of  work  and  unemployment  ought  to  be  able  to 
answer  all  these  questions  satisfactorily. 

5.  The  upholders  of  the  competitive  system  seem  to  rely 
simultaneously  on  two  contradictory  hypothesis.  They  try  to 
swim  and  skate  at  the  same  time.  They  pretend  to  believe 
that  work  is  amply  sufficient  for  all,  and  yet  utterly  insufficient 
for  all  at  one  and  the  same  time.  From  their  strenuous  ef¬ 
forts  to  capture  work  at  home  and  abroad,  it  is  evident  that 
they  regard  work  as  something  extremely  rare,  and  vet  when 
they  are  called  upon  to  face  the  unemployment  problem,  they 
turn  round  and  protest,  that  there  is  always  ample  work  for 
all,  that  there  is  no  need  for  any  real  worker  to  be  without 
work,  unless  he  chooses  to  be  so.  They  speak  of  the  unem¬ 
ployed  as  being  really  the  unemployable  human  drones  who 
are  being  rightly  served  for  what  they  deserve.  These  same 
people,  in  controverting  Socialism,  or  other  schools  of  revolu¬ 
tionary  reform,  tr round  once  more  and  argue  that  there 
is  not  work  enough  for  all,  that  everybody  must  compete  for 


10 


THE  UNEMPLOYMEN1  PROBLEM. 


work  and  get  what  he  can,  and  that  if  someone  has  to  be  with¬ 
out  work  it  is  nobody's  fault.  The  state  is  under  no  obliga¬ 
tion  to  create  work  for  the  unemployed,  nor  is  it  possible  to 
provide  work  for  them,  unless  you  set  them  to  dig  holes  and 
fill  them  up.  In  fact,  these  men  do  not  seem  to  have  made  up 
their  minds  as  to  whether  there  is  enough  of  work  for  all  or 
no. 


6.  But  on  the  whole  there  seems  to  be  a  general  feeling 
that  work  is  not  enough  for  all,  and  that  competition  for  work 
is  both  necessary  and  justifiable.  The  struggle,  the  waste,  and 
misery  of  those  who  fail  to  secure  their  share  of  work  are  re- 
gretable  evils,  but  as  necessary  results  of  an  inexorable  law  of 
nature  they  are  none  the  less  inevitable.  From  their  point  of 
view,  it  is  as  if  the  Creator  of  the  world  had  blundered  in  his 
work.  If  he  had  only  made  the  earth  less  fertile,  the  rivers  and 
seas  less  navigable,  the  trees  harder  to  fell,  the  earth  and  rocks 
harder  to  bore,  and  the  ores  harder  to  smelt,  there  would  have 
been  more  work  to  do  and  the  world  would  have  been  happier ! 
Unable  to  undo  what  God  has  done,  they  proceed  to  suggest 
other  remedies,  such  as  checking  the  growth  of  population  by 
prudential  restraints,  or  by  immoral  interference  with  laws 
of  nature,  or  by  restriction  of  immigration.  They  seem  to 

6.  I.  Severe  restriction  of  immigration  should  come,  and  come 
quickly.  But  restriction  to  immigration  is  not  enough;  the  surplus 
population  is  already  here!  Our  cities  are  over-crowded  with  utter¬ 
ly  unskilled  labor.  It  is  estimated  that  in  New  York  City  alone  there 
are  100,000  unemployed  clerks.  The  great  problem  is  already  with 
us.” — Prof.  J.  J.  Stevenson. 

(A  Query  to  Prof.  Stevenson:  Are  the  100,000  clerks  included 
in  the  utterly  unskilled  labor,  or  does  he  suggest  that  the  utterly  un¬ 
skilled  laborers  have  displaced  the  100,000  clerks  and  thrown  them 
out  of  work?) 

If.  “A  more  strict  regulation  of  immigration  would  have  beet.. 

advisable .  We  have  admitted  without  hindrance,  a  very  large 

number  who  have  made  life  harder  for  the  wage-earner  already  here, 
and  have  swollen  the  number  of  the  unemployed.” — Prof.  Devine. 

III.  John  Mitchell  also  recommends  “restriction  to  immigration” 
as  calculated  to  give  “enormous  practical  relief.” 


LECTURE  i— theory  of  unemployment. 


11 


argue  that  as  the  total  amount  of  work  is  limited,  any  7increase 
in  population  will  decrease  the  share  of  work  per  head,  and 
conversely  a  decrease  of  population  would  increase  the  share. 

7.  To  demonstrate  the  incorrectness  of  this  view,  let  us 
assume  that  on  the  night  of  December  31,  1911,  all  the  unem¬ 
ployed  in  the  United  States  are  carried  in  a  steamer  and  dumped 
into  the  Atlantic.  We  may  now  expect  the  new  year  to  begin 
with  a  perfect  economic  balance,  a  man  for  every  work  and  a 
work  for  every  man.  The  unemployed  in  the  United  States 
are  estimated  at  about  8two  millions,  and  the  cost  in  human 
life  to  secure  the  balance  is  too  barbarous  to  contemplate  in 
spite  of  its  being  imaginery.  But  as  I  fail  to  see  any  difference 
between  starving  men  on  land  and  dumping  them  at  sea,  I 
make  the  assumption  with  all  due  apology.  And  now  to  return 
to  the  point :  How  long  will  the  economic  balance  remain  un¬ 
disturbed?  Will  it  remain  so  even  for  one  single  year  or  for  a 
month  or  even  for  one  week  ?  The  two  millions  of  people,  even 
after  their  death,  will  continue  to  upset  the  balance.  It  is  true 
that  being  unemployed  these  men  could  earn  nothing;  but 
they  ate  something,  drank  something,  wore  something,  and 
lived  somewhere.  Now  that  they  are  gone,  the  baker  and  the 
clothier  will  have  less  demand  for  their  goods.  The  rooms  oc¬ 
cupied  by  these  people  will  also  be  vacant  now.  The  wages  of 
the  workers  might  for  a  time  rise  on  account  of  there  being  no 

7.  This  view  is  held  by  Socialists  generally,  though  not  yet 
recognized  officially  in  their  platform.  It  can  be  found  in  the  writings 
o.  leading  Socialists.  The  following  extract  from  the  New  York  Call, 
July  5,  1915,  is  an  illustration: 

“But  the  aftermath  of  war  will  be  the  same  this  time  as 
always,  and  the  American  workers  must  not  let  themselves 
be  deceived  too  much  by  this  appearance  of  prosperity.  After 
the  war  is  over,  the  armies  will  be  disbanded  all  over 

Europe .  Those  who  cannot  get  work  in  their  own 

countries  will  look  elsewhere  and  million-s  of  them  will  prob¬ 
ably  come  to  America,  the  land  of  freedom,  and  peace  and 
opportunity.  The  result  may  be  the  flooding  of  the  Ameri¬ 
can  labor  market  and  the  doubling  of  the  army  of  unem¬ 
ployed  here.” — “Menace  of  Unemployment,”  Winfield  R.  Gay¬ 
lord. 

8.  I  take  this  figure  from  Edward  Eads  How’s  telegram  to 
President  Taft  inviting  him  on  behalf  of  the  two  million  unemployed 
to  attend  the  convention  at  Cincinnati.  John  Mitchell  estimates 
the  number  at  four  and  one-half  millions. 


12 


THE  UNEMPLOYMENT  PROBLEM. 


competition  among  them,  but  the  demand  for  commodities  in 
several  departments  will  go  down,  the  prices  will  fall  the  trade 
will  suffer,  some  of  the  factories  and  stores  will  have  to  be 
closed,  wages  will  go  down  once  more,  a  great  number  of 
workers  will  be  thrown  out  of  employment  ready  for  9 10another 
dumping  expedition  !  Unemployment  has  nothing  to  do  with 
population.  The  popular  fallacy,  that  over-population  is  the 
cause  of  unemployment  would  be  a  good  joke  if  it  were  inno¬ 
cent,  but  the  grave  consequences  of  this  belief  make  it  a  crime 
against  humanity  and  treason  against  their  own  faith  in  God. 

8.  Work  is  not  something  substantial,  capable  of  exist¬ 
ing  by  itself  independent  of  man;  work  is  the  effort  to  sat'sfy 
1Gnced.  As  long  as  there  is  man  there  is  need;  as  long  as  there 

9.  “What  is  even  graver  is,  that  we  are  year  by  year  creating 
new  unemployables.  The  class  is  indeed  no  mere  inheritance  from  an 
evil  past.  Its  members  are  not  on  the  whole  long  lived.  If  we  were 
suddenly  relieved  of  the  whole  of  the  present  incubus  without  any 
change  in  the  conditions  we  should  within  ten  or  twelve  years  have 
just  as  many  unemployed  on  our  hands  a-s  ever.” — Report  of  the  Royal 
Commission  on  the  Poor  Laws.  Vol.  Ill,  by:  1,  Rev.  Prenderbury 
Wakefield;  2,  Francis  Chandler;  3,  George  Lansbury;  4,  Mrs.  Sydney 
Webb. 

The  honorable  commissioners  are,  unfortunately,  quite  wrong 
on  one  point,  viz.,  their  estimate  of  time.  In-stead  of  ten  or  twelve 
“years,”  they  ought  to  have  said  “weeks.”  The  existing  unemployed 
act  like  the  steam  in  a  boiler  which  prevents  the  formation  of  more 
steam.  The  unemployed,  even  if  they  be  paupers,  are  still  consum¬ 
ers  and  keep  approximately  an  equal  number  of  men  at  work.  So 
soon  as  they  are  taken  off  our  hands,  tho-se  who  worked  for  them  will 
he  thrown  out  of  work  and  our  hands  will  be  full  again.  The  com¬ 
missioners,  like  everybody  else,  are  unconscious  of  the  function  of  the 
unemployed.  They  are  doing  an  important  service,  and  until  you  are 
prepared  to^  dispense  with  that  service  it  is  no  u-se  trying  to  get  rid  of 
them  in  any  way  whatever. 

10.  Here  and  everywhere  throughout  this  lecture  the  word  need 
is  used  in  its  widest  sense,  including  every  kind  of  need — including 
even  the  most  extravagant  luxuries.  From  the  producer’s  point  of 
view  every  need  is  need,  whether  the  need  i-s  real  or  fancied,  sensible 
o<-  sdly.  refined  or  vulgar,  is  a  matter  of  no  consequence  whatever. 
The  only  question  that  concerns  him  is,  how  urgent  is  the  need? 
The  needs  of  the  unemploj^ed  are  obviously  far  more  urgent  than 
those  of  their  possible  employers.  The  allegation  that  the  “unem¬ 
ployed  have  crowded  the  labor  market,  bringing  in  more  labor  power 
than  there  is  need  for,”  i-s  not  only  untrue,  but  also  unfair,  for  the 
urgency  of  their  needs  gives  with  absolute  certainty,  an  amount  of 
employment  to  others  who  refuse  to  employ  them  in  return. 


LECTURE  I — THEORY  OF  UNEMPLOYMENT. 


13 


is  need  there  is  work.  Each  man,  as  he  comes  into  the  world, 
brings  witn  him  his  share  of  need  and  work.  Each  man,  as  he 
leaves  the  world,  takes  away  with  him  his  share  of  further  need 
and  v/ork.  There  is  neither  too  much  work  nor  too  little  work 
in  the  world ;  it  is  always  exactly  proportional  to  the  number  of 
people.  Therefore,  unless  any  person  withholds  from  another 
person  his  rightful  share  of  work,  there  is  no  reason  for  any 
person  being  out  of  v/ork,  and  conversely  if  a  person  is  out  of 
work,  it  is  evident  that  something  must  have  kept  him  out 
oi  his  due  share  of  work ;  for  example,  some  other  person  may 
have  robbed  him  of  his  share,  the  means  and  method  of  rob¬ 
bing  him  of  his  rights  being  merely  a  matter  of  detail.  THIS 
IS  THEORY  OF  WORK. 

9.  The  theory  of  unemployment  is  comparatively  more 
difficult.  The  roots  of  this  evil  extend  far  back  into  prehistoric 
times — into  the  dawn  of  earliest  civilization.  It  required  for 
its  full  development  certain  conditions  which  could  only 
come  into  existence  at  a  certain  stage  of  civilization,  and  these 
conditions  are  therefore  wrongly  held  responsible  for  the  evil. 
For  example,  insufficiency  of  work,  partly  due  to  a  very  large 
part  of  our  modern  work  being  done  by  labor-saving  machines, 
and  sudden  increment  of  population,  are  two  important  sec¬ 
ondary  causes;  they  are  responsible  for  the  two  popular  fall¬ 
acies,  viz.,  that  there  is  not  enough  of  work  for  all,  and  that 
over-population  is  the  cause  of  unemployment.  I  have  already 
explosed  the  fallacy  of  both  these  views.  A  third  cause  of  un¬ 
employment  usually  alleged,  is  failure  of  resources. 

10.  nFailure  of  natural  resources  is  not  an  impossible 
cause,  but  no  country  in  the  world  has  yet  reached  this  state 
of  exhaustion,  and  for  a  long  time  to  come  there  is  no  fear  of 
such  a  thing  coming  to  pass.  The  coal  mines  of  Pennsylvania 
may  fail,  and  Niagara  may  cease  to  flow  one  day,  but  these 

11.  Failure  of  resources  operates  as  a  cause  of  unemployment 
only  when  the  failure  is  complete  and  extensive.  A  oartial  failure,  on 
the  contrary,  creates  more  work.  For  example,  if  the  fertility  of  the 
soil  i-s  reduced  by  10  per  cent.,  10  per  cent,  more  land  will  have  to  be 
brought  under  cultivation,  o,r  an  amount  of  food  grain  shall  have  to 
be  imported  and  something  given  to  foreign  countries  in  exchange. 
In  either  case  there  will  be  more  work  to  do  Local  or  temporary  fail¬ 
ure  of  resources  may  cause  unemployment  for  a  short  time  but  as  soon 
as  the  disturbing  causes  are  removed  work  i-s  resumed  with  a  com- 
nen satins  rush. 


14 


THE  UNEMPLOYMENT  PROBLEM. 


things  have  not  happened  yet,  and  their  possible  failures  in  the 
very  distant  future  cannot  be  responsible  for  the  unemploy¬ 
ment  of  to-day.  The  same  explanation  is  also  offered  with 
reference  to  the  unemployment  in  the  countries  of  the  old 
world,  and  yet  it  is  well  known,  that  those  countries  and  the 
United  States  also,  are  making  the  most  strenuous  efforts  to 
capture  foreign  markets,  and  to  defend  their  own  markets 
against  foreign  invasion.  If  failure  of  resources  were  the  real 
source  of  trouble,  would  it  not  be  an  extremely  foolish  and 
short-sighted  policy  to  waste  the  scanty  resources  of  an  ex¬ 
hausted  country  on  foreign  markets?  Could  the  people  of 
Britain  ever  dream  of  adopting  a  policy  calculated  to  encour¬ 
age  exportation  of  wheat  for  any  price?  Failure  of  resources! 
In  what  respect  have  they  failed  in  the  United  States?  Have 
the  mines  failed  to  yield  oil,  and  coal,  and  iron,  and  silver,  and 
gold?  Have  the  Niagara  Falls  ceased  to  supply  power,  and 
have  copper  wires  ceased  to  transmit  it?  Has  the  land  ceased 
to  grow  vegetables  or  the  seas  to  breed  fish?  Have  the  sheep 
ceased  to  grow  wool,  or  the  hens  ceased  to  lay  eggs?  And 
lastly,  has  human  ingenuity  failed?  Is  the  American  of  the 
twentieth  century  less  inventive  and  resourceful  than  his  fore¬ 
fathers  in  the  eighteenth  and  nineteenth  centuries?  Failure  of 
resources  in  the  United  States !  It  is  an  insult  to  the  land,  and 
its  people.  No,  the  resources  have  not  failed,  and  are  not  likely 
to  fail  for  a  long  time  yet.  No  capitalist  ever  complains  of  a 
failure  of  resources.  As  far  as  he  is  concerned,  they  are  inex- 
hausted  and  inexhaustible.  He  is  anxiously  waiting  for  a  de¬ 
mand  for  more  work  to  employ  his  resources.  He  wants  more 
work  for  his  resources,  not  more  resources  for  his  work.  In 
other  words,  unemployment  is  not  limited  to  labor,  it  extends 
to  the  capitalist  and  his  resources. 

11.  The  Socialist  Party  of  the  United  States  holds  capi¬ 
talism  to  be  the  cause  of  unemployment. 

“The  Socialist  Party  of  the  United  States  declares 
that  the  capitalist  system  has  outgrown  its  historical 
function,  and  has  become  utterly  incapable  of  meet¬ 
ing  the  problems  now  confronting  society.  We  de¬ 
nounce  this  outgrown  system  as  incompetent  and 
corrupt  and  the  source  of  unspeakable  misery  to  the 
whole  working  class. 


EECTUR"E  I— THEORY  OF  UNEMPLOYMENT. 


15 


“Under  this  system  *  *  *  *  Multitudes  of 

unemployed  walk  the  streets  of  our  cities  or  trudge 
from  state  to  state  awaiting  the  will  of  the  masters  to 
move  the  wheels  of  industry. ’—National  Socialist 
Platform,  1912. 

The  Party  platform  does  not  state  specificially  in  what 
.way  capitalism  causes  unemployment,  but  from  the  utterances 
of  the  expounders  of  Socialism,  it  seems  that  in  their  opinion 
capitalistic  12ownership  of  implements  of  production  and  a 
system  of  production  for  prifit  are  responsible  for  unemploy¬ 
ment.  As  a  typical  illustration  of  their  line  of  argument  we 
often  hear  something  like  the  13following:  “Here  is  a  shoe 
factory,  and  here  outside  the  factory  is  a  man  who  could  make 

12.  “ . The  worker  owns  no  machinery  and  can  get  access 

to  no  machinery  except  on  such  terms  as  he  may  be  able  to  make  with 
its  owners.  Socialists  urge  the  people  to  consider  the  results  of  this 
unprecedented  situation.  First,  there  is  great  insecurity  of  employ¬ 
ment . But  worse  than  the  uncertainty  of  employment  is  the 

absolute  certainty  that  millions  of  men  must  always  be  out  of  work. 

. If  they  could  but  work,  their  earnings  would  vastly  increase 

the  amount  of  money  in  circulation  and  thus  increase  the  buying  power 
of  everybody.  But  they  cannot  work  because  they  do  not  own  the 
machinery,  without  which  they  cannot  work,  and  the  men  who  own 
it  will  not  let  it  be  used,  because  they  cannot  see  any  profits  for  them¬ 
selves  in  having  it  used.” — Allan  L.  Benson,  “Truth  About  Social¬ 
ism,”  page  16. 

13.  “A  man  possessing  his  own  tools  or  land  may  always  employ 
himself,  and  though  it  may  at  times  be  necessary  for  him  to  sell  his 
products  for  a  verv  low  price,  he  need  not,  except  in  extraordinary 
times,  become  dependent  on  others  for  relief.  The  tools  of  the  modern 
worker  are  the  machines;  both  it  and  the  land  are  owned  by  others. 
He  cannot  work  on  the  land  or  at  the  machine  except  by  permission 
of  others.  If  the  owner  does  not  find  it  profitable  to  employ  him, 
the  workman  must  remain  idle.” — Robert  Hunter:  Poverty. 

This  well-known  Socialist  throws  in  the  qualifying  clause,  “though 
it  may  at  times  be  necessary  for  him  to  sell  his  products  for  a  very 
low  price,”  as  if  this  were  of  no  serious  significance,  and  yet  none 
krows  better  than  he,  that  this  is  just  where  the  workman  feels  the 
most  pinch.  There  was  a  time,  only  a  few  years  ago,  when  the  worker 
had  his  own  tools  and  competed  with  the  machine.  Of  course,  he  had 
b-  sell  is  labor  “for  a  very  low  price,”  but  he  was  not  dependent  upon 
others,  if  that  be  a  consolation  when  a  worker  is  unable  to  sell  his 
produce,  and  has  to  beg  for  is  livelihood  even  after  he  has  worked! 
The  workman,  however,  took  a  different  view.  He  threw  away  his 
tools  and  accepted  the  heavy  yoke  of  the  capitalist  in  order  to  escape 
the  still  heavier  yoke  of  the  customer.  See  infra,  paragraph  13. 


16 


THE  UNEMPLOYMENT  PROBLEM. 


a  pair  of  shoes  if  he  were  allowed  to  use  the  machinery,  but 
he  cannot  work  without  the  permission  of  the  capitalist  who 
owns  the  machinery,  and  the  capitalist  does  not  and  will  not 
permit  except  on  terms  of  what  might  be  called  voluntary 
slavery,  and  not  even  on  those  terms  if  he  cannot  see  his  way 
clear  to  make  profit. ”  This  line  of  argument  might  explain 
why  the  employed  workers  are  in  the  condition  of  slaves,  but 
it  does  not  explain  why  some  people  should  be  unemployed 
even  when  they  are  willing  to  work  as  slaves,  or  even  on  worse 
terms.  That  unemployment  is  due  to  want  of  permission  is  a 
fact,  but  that  this  want  of  permission  has  nothing  to  do  with 
capitalistic  monopoly  of  implements,  can  be  easily  demon¬ 
strated  by  a  counter  illustration.  Here  is  a  cabman,  his  imple¬ 
ments  of  work  are  his  cab  and  horse.  Nobody  has  monopol¬ 
ized  them,  he  is  free  to  make  full  use  of  them  to  earn  his  liveli¬ 
hood  ;  yet  the  cabman  is  idle  and  unemployed  for  half  his  time ; 
sometimes  he  cannot  get  work  for  a  whole  day,  and  he  is  only 
wasting  his  time  in  waiting  for  customers.  Mr.  Walker 
passes  by  the  way,  the  cabman  offers  his  cab,  but  Mr.  Walker 
chooses  to  walk  though  he  can  afford  to  ride.  The  cabman 
cannot  work  without  the  permission  of  Mr.  Walker,  and  is 
therefore  unemployed.  The  same  is  true  of  every  trade  and 
every  profession. 

12.  The  mistaken  notion  that  the  capitalist  is  the  em¬ 
ployer  is  the  source  of  all  the  misconception  of  the  real  nature 
of  the  economic  problem.  It  leads  the  attention  of  all  economic 
thinkers  and  writers  to  be  directed  against  the  capitalist,  and 
worse  than  that,  it  kindles  and  keeps  up  a  hatred  against  the 
capitalist,  and  makes  any  scientific  analysis  impossible  by 
vitiating  the  powers  of  free  and  unbiased  thinking.  The  strong 
feeling  against  the  capitalist  is  greatly  responsible  for  the 
economic  situation  growing  ever  more  gloomy  and  threatening 
each  day.  A  solution  of  the  problem  requires  a  correct  com¬ 
prehension  of  the  true  relation  of  the  capitalist  to  the  indus¬ 
trial  and  economic  framework  of  society. 

13.  In  every  case  employment  depends  upon  the  per¬ 
mission  of  the  customer  who  is  the  real  employer.  That  this 
granting  or  withholding  of  permission  by  the  customer  is  done 
indirectly  through  the  agency  of  the  capitalist  does  not  alter 
the  fact,  that  the  customer — not  the  capitalist — is  the  ultimate 


LECTURE  I— THEORY  OF  UNEMPLOYMENT. 


17 


and  therefore  the  true  employer.  The  capitalist  is  no  employer 
at  all,  except  in  so  far  as  he  employs  anybody  for  his  private 
service,  or  purchases  anything  for  his  private  use.  In  his 
capacity  as  a  capitalist  he  is  in  every  case  merely  an  agent, 
acting  in  behalf  of  the  customer.  He  cannot  be  expected  to 
employ  more  men  under  him  than  he  can  expect  to  find  work 
for  from  his  customers.  He  is  the  middleman  between  the 
customer  and  the  workers — i.  e.  between  the  real  employer  and 
the  employee.  He  is  himself  an  employee  of  customers,  work¬ 
ing  generally,  not  for  any  fixed  salary,  but  for  what  profit  he 
can  make.  Consequently  he  has  to  be  always  on  the  lookout  for 
customers,  and  it  is  easy  to  see  that,  like  the  cabman  on  the 
street,  he  is  unemployed  for  most  of  his  time.  His  profits  are 
his  wages,  and  considering  that  his  employment  is  so  irregular 
and  uncertain,  it  is  but  natural  that  his  wages  should  be 
higher  than  if  the  employment  were  guaranteed  and  steady. 
The  question  as  to  whether  the  wages  of  the  capitalist  are  fair 
and  reasonable,  considering  the  irregularity,  uncertainty,  risk 
and  extra  expense  often  necessary  to  secure  employment,  or 
whether  they  are  unreasonably  high  and  exhorbitant,  even  after 
making  all  due  allowance  for  risks,  etc.,  is  irrelevant  at  this 
stage.  But  even  admitting  that  they  are  higher  than  they 
ought  to  be,  that  does  not  explain  why  so  many  willing  work¬ 
men  are  out  of  work.  Unemployment  has  nothing  to  do  with 
capitalistic  monopoly  of  instruments  of  work.  A  man  is  out 
of  work,  not  because  his  services  are  not  needed  by  the  capital¬ 
ist,  but  because  they  are  not  needed  by  the  customer,  i.  e.,  by 
the  employed  section  of  society.  The  capitalist  is  also  re¬ 
sponsible  for  unemployment  in  so  far  as  he  too  is  an  employed 
member  of  society,  but  only  to  that  extent  and  no  more.  He 
bears  no  further  responsibility  by  reason  of  his  being  a  cap¬ 
italist.  Capitalism  could  not  have  been  the  cause  of  unemploy¬ 
ment.  when  we  know  as  a  historical  fact  unemployment  did 
exist  before  capitalism. 

14.  The  capitalist  does  not  make  unemployment.  On  the 

contrary,  in  his  capacity  as  a  capitalist,  he  serves  to  diminish 
unemployment  to  a  slight  extent.  I  am  not  referring  to  the 
employment  eiven  to  those  who  minister  to  his  luxuries ;  this 
he  does,  not  in  his  capacity  as  a  capitalist  but  merely  as  a  rich 
man  ;  any  rich  man,  a  lawyer,  a  doctor,  a  pastor,  with  a  thou- 


18 


THE  UNEMPLOYMENT  PROBLEM. 


sand  dollars  a  week  as  wages,  would  do  just  the  same  thing.  I 
am  referring  to  the  extra  employment  given  by  the  capitalist 
in  his  capacity  as  a  capitalist,  i.  e.,  in  the  course  of  his  profes¬ 
sional  duties  as  a  capitalist.  I  will,  however,  waive  this  line  oi 
argument  for  the  present,  as  it  involves  a  deeper  study  oi 
nature  of  capitalism  than  what  is  possible  in  this  lecture.  I 
will  revert  to  this  question  when  discussing  the  profit  system. 
Under  the  system  of  competitive  commercialism,  the  capitalist 
somewhat  relieves  unemployment  in  one  more  way.  The 
enormous  waste  due  to  competitive  commercialism  is  well- 
known,  it  will  be  found  on  every  page  of  theoretical  Socialism,, 
and  whatever  else  capitalism  may  have  to  say  against  Social¬ 
ism,  no  capitalist  has  ever  attempted  to  deny  this  charge.  The 
waste  is  too  great  to  be  overlooked,  too  clear  to  be  denied. 
This  waste,  whatever  else  we  may  have  to  say  against  it,  has 
one  redeeming  feature — it  gives  employment  to  workers.  It  is 
at  present  the  only  chance  of  the.  workman,  and  whatever 
might  be  the  state  of  things  under  Socialism,  any  prevention 
of  waste. at  present  would  be  one  of  the  greatest  and  all  but 
universal  calamity  under  the  existing  economic  system.  Foolish 
as  most  of  this  waste  no  doubt  is,  it  is  at  present  our  only  hope 
and  the  only  reason  why  there  is  so  much  unemployment  is 
that  there  is  not  waste  enough.  Every  method  of  avoiding 
waste,  every  new  invention  of  labor-saving  machines,  ever); 

'  new  system  of  organizing  and  economizing  work,  operates 
most  harmfully  on  the  working  class.  On  the  contrary,  a  fire 
or  earthquake  destroys  a  city,  a  war  threatens  to  destroy  a  na¬ 
tion,  a  great  work  is  thus  thrust  upon  a  nation,  the  labor  and 
*  resources  of  the  country  are  in  demand,  capital  and  labor  unite 
for  a  time,  men  are  at  work,  and  everybody  except  the  direct 
victims  of  the  catastrophe  are  happy  for  the  time.  Who  car 
expect  a  healthy  moral  sentiment  to  develop  in  a  society  where; 
one  man’s  calamity  is  the  only  hope  for  another  man’s  lifei 
Disguise  the  fact  as  you  may,  you  cannot  ignore  it,  that  the 
unemployed  is  the  deadliest  enemy  of  society.  His  life  de¬ 
pends  upon  his  getting  employment,  but  nobody  cares  to  em¬ 
ploy  him  except  under  pressure  of  some  threatening  calamity 
and  yet  society  is  receiving  employment  from  him  all  the  time 
With  every  morsel  of  bread  he  eats,  and  with  every  rag  he 
wears,  he  gives  employment  to  somebody,  for  the  food  he  eatgl 


lecture  i— theory  of  UNEMPLOYMENT. 


19 


and  the  clothes  he  wears  were  made  for  him  by  somebody  who 
has  thereby  earned  his  wages.  What  more  is  necessary  to 
embitter  human  hearts  and  to  create  a  race  of  Ishmaels? 

15.  The  unemployed  are  the  deadliest  enemies  of  society. 
The  only  reason  why  they  do  not  seem  to  be  so  dangerous 
ps  they  really  are  and  ought  to  be,  is  that  they  are  powerless 
tc  inflict  the  punishment  which  the  ungrateful  society  so  rich¬ 
ly  deserves.  They  are  the  plebeians,  crushed  and  writhing 
under  the  iron  heels  of  social  tyranny,  whom  the  society,  cal- 
loused  by  a  false  sense  of  security,  ignores  with  contemptuous 
disregard.  But  now  and  then  the  worm  will  turn.  A  Marius 
here,  a  Caesar  there,  will  rise  out  of  these  very  plebeians  and 
reduce  the  pride-blind  patricians  to  most  abject  servitude. 
Talk  of  the  selfish  capitalist!  Who  are  the  capitalists?  They 
are  the  Caesars  of  society;  they  are  the  unemployed  with  a 
vengeance.  The  Socialist  literature  speaks  of  the  capitalists 
as  being  the  idlers,  the  drones,  the  parasites  of  society.  What 
else  could  they  be?  What  other  chance  had  society  left  for 
them?  Thomas  Tipton  began  his  career  in  New  York  as  a 
parasite.  He  was  willing  and  able  to  do  real  productive  work, 
but  he  was  not  wanted.  He  started  shuffling  money  from 
the  pocket  of  one  hotel-keeper  to  that  of  another  and  got  a 
part  of  the  shuffled  money  as  his  share.  The  lesson  he  learned 
he  never  forgot,  but  he  was  not  born  to  remain  a  parasite.  As 
soon  as  he  was  in  a  position  to  employ  himself,  he  proved  him¬ 
self  a  creative  genius.  He  is  to-day  known  as  a  wealth  pro¬ 
ducer  and  not  a  mere  parasitic  wealth  shuffler.  What  if  he  had 
remained  for  life  the  parasite  he  was  compelled  to  be  in  the 
earlier  part  of  his  career?  What  was  there  to  prevent  it? 
There  was  a  time  when  Andrew  Carnegie  was  on  the  verge  of 
starvation.  He  wnated  only  an  honest  day’s  work  for  honest 
day’s  wages  and  could  not  get  it.  What  did  society  do  for 
him  in  his  hour  of  distress?  They  compelled  him  to  fight  for 
his  life.  Like  the  millions  of  unemployed  he  fought  for  his  life, 
but  unlike  those  millions  he  won  the  fight.  Whether  he  won  by 
chance  or  by  ability,  whether  he  won  by  fraud  or  by  force  has 
no  bearing  on  the  question.  He  was  compelled  to  wage  an 
uneven  fight  like  all  the  rest  of  the  unemployed:  that,  and 
that  alone  is  the  point.  The  capitalist  is  often  accused  of  hav¬ 
ing  a  greater  regard  for  the  almighty  dollar  than  for  human- 


20 


THE  UNEMPLOYMENT  PROBLEM. 


ity.  What  right  has  humanity  to  expect  anything  else?  In  his 
clays  of  adversity  it  was  the  dollar  that  saved  him,  not  human¬ 
ity.  Humanity,  when  it  had  the  chance,  wanted  from  him  his 
dollar,  but  the  capitalist  of  to-day  who  was  then  but  a  needy 
workman  out  of  work  was  not  wanted.  The  capitalist  does 
not  owe  his  present  success  to  humanity,  and  humanity,  or 
rather  the  inhumanity,  to  give  it  a  more  appropriate  name, 
has  no  right  to  take  him  to  task  for  his  devotion  for  the  dollar. 
In  fact,  considering  the  way  he  was  treated  by  society  when 
they  had  the  chance,  I  am  compelled  to  acknowledge  that  the 
capitalist  has  been  far  more  clement  and  forgiving  in  his  hour 
of  triumph  than  any  Marius  or  Caesar  could  have  been. 

16.  The  capitalist  is  a  moral  victim  of  unemployment. 
He  does  not  create  unemployment,  it  is  unemployment  that 
has  created  14him,  and  so  long  as  unemployment  remains  you 
cannot  unmake  him.  He  is  not  responsible  for  unemploy¬ 
ment;  on  the  contrary  his  luxury  and  his  competitive  waste 
have  created  a  considerable  amount  of  extra  employment,  and 
to  that  extent  he  has  relieved  the  pressure,  By  means  of  the 
profit  system  he  relieves  the  pressure  still  further,  but,  as  I 
said  before  I  waive  that  consideration  for  the  present.  He  can¬ 
not  relieve  the  whole  of  the  pressure,  for  it  is  not  in  his  power 
to  do  it.  He  is  not  an  independent  employer  by  himself,  he 
can  act  only  as  an  agent  for  the  customer  who  is  the  real  em¬ 
ployer.  He  is  a  sort  of  private  employment  bureau,  employ¬ 
ing  workmen  for  customers'  use,  but  he  differs  from  the  bureau 
in  not  asking  the  workman  to  wait  until  work  comes  up.  He 
employs  them  in  anticipation  of  work,  often  at  a  risk  to  him¬ 
self  by  giving  more  employment,  than  what  the  economic  need 
of  the  market  allows.  For  every  capitalist  that  succeeds,  there 
are  twenty  that  fail,  and  failure  of  a  capitalist,  means,  that 
his  business  has  cost  him  more  than  his  income,  that  he  has 
given  more  employment  to  his  workmen  than  what  he  has  re¬ 
ceived  from  his  customers ;  the  wages  for  the  difference  he  has 
paid  out  of  his  capital  until  he  failed.  The  capitalist  might, 

14.  “It  (capitalism)  can  spring  into  life,  only  when  the  owner 
of  the  means  of  production  and  subsistence  (embryo-capitalist)  meets 
in  the  market  with  the  free  _  laborer  selling  his  labor-power  (une- 
employed).  And  this  one  historic  condition  (unemploment)  com¬ 
prises  a  world’s  history.” — Marx:  Capital,  Vol.  1,  page  189. 


LECTURE  i— theory  of  UNEMPLOYMENT. 


21 


with  some  show  of  justice,  be  accused  of  cutting  down  wages 
and  of  making  slaves  of  the  men  in  his  employment, — though 
even  on  this  point  there  is  much  to  be  said  in  his  defense, — 
but  he  is  not  responsible  for  the  unemployment  of  those  who 
are  not  employed.  The  contention  that  labor  saving  mach- 
ii.ery  is  one  of  the  causes  of  unemployment  need  not  be  chal¬ 
lenged;  we  are  not  discussing  here,  whether  machinery  causes 
unemployment  or  no.  Assuming  that  machinery  is  at  least  a 
contributory  cause  of  unemployment,  the  question  before  us  at 
present  is  whether  capitalistic  ownership  contributes  anything 
towards  further  unemployment,  or  in  other  words,  apart  from 
what  unemployment  may  be  caused  by  machinery  independ¬ 
ent  of  its  capitalistic  ownership,  does  the  capitalistic  owner¬ 
ship  itself  cause  any  unemployment.  Such  ownership  while  it 
no  doubt  contributes  to  his  profit,  does  not  in  any  way  con¬ 
tribute  to  unemployment. 

17.  The  capitalist  is  not  in  the  business  for  love  or  hate; 
he  is  there  for  profit,  and  he  will  always  follow  the  line  of 
greatest  profit.  His  profit  depends  upon  three  things  :  Capital, 
producer  and  consumer,  or  rather,  purchaser.  Without  these 
three,  there  can  be  no  profits;  no  two  of  them  could  suffice, 
all  three  of  them  are  absolutely  necessary.  Of  these  three 
he  has  the  first,  viz.,  the  capital.  That  is  what  makes  him  a 
capitalist.  The  existence  of  unemployment  is  in  itself  a  con¬ 
clusive  proof,  that  there  are  workers  willing  to  work  and  give 
profit  to  the  capitalist  as  a  price  of  the  opportunity  to  work. 
If  then,  the  workers  are  anxious  to  work  and  willing  to  let  the 
capitalist  obtain  the  profit,  and  if  the  capitalist  is  anxious  to 
give  employment  and  get  the  profit,  and  still  if  the  workers 
have  to  remain  unemployed,  and  the  capitalist  has  to  go  with¬ 
out  the  desired  profit,  the  cause  of  the  unemployment  must  be 
•Somewhere  else.  As  there  are  three,  and  only  three,  factors 
necessary  for  profit,  and  therefore  for  the  employment  of  the 
producers  under  the  private  capitalistic  system,  and  as  two  of 
these  factors  are  shown  to  be  not  lacking,  it  follows  as  a  neces¬ 
sary  conclusion,  that  the  lack  of  the  third  factor  must  be  the 
cause  of  unemployment.  In  other  words,  unemployment  is 
not  caused  by  the  unwillingness  of  the  capitalist  to  employ, 
but  by  the  unwillingness  of  the  purchaser  i.  e.,  of  the  employed 
workers,  to  buy  the  produce.  As  long  as  there  is  some  one 


22 


the:  unemployment  problem. 


to  buy  what  is  produced,  the  capitalist  will  keep  up  the  pro¬ 
duction,  and  will  employ  all  he  can  to  the  full  limit  of  his 
employing  power. 

18.  This  leads  us  to  another  theory  of  unemployment, 

viz.,  the  Anarchist  Theory.  According  to  the  Anarchist  phil¬ 
osophy  there  is  no  purchaser  for  a  part  of  the  produce  for  the 
simple  reason  that  the  purchasing  power  of  the  producing  class 
as  a  whole,  is  less  than  its  total  production  on  account  of  the 
profits  of  the  capitalist.  By  “capitalist”  is  meant  here  the 
“owner  of  all  kinds  of  property,  such  as - land,  natural  re¬ 

sources,  machinery,  or  money.”  Suppose  the  worker  in  a  fac¬ 
tory  produces  in  one  day  $10.00  worth  of  produce  and  gets  as 
wages  only  $4.00,  then  he  can  buy  back  from  the  market  to 
the  extent  of  four  dollars  worth  only.  The  remaining  six  dol¬ 
lars  worth  will  be  left  as  unsold  stock  on  the  hands  of  the 
capitalist.  In  all  the  domain  of  industry,  take  what  branch  or 
trade  you  will,  you  will  find  always  the  same  story ;  pro¬ 
duced  ;  ten  dollars ;  received  as  wages :  four  dollars.  Even 
the  highly  paid  workers  are  no  exceptions;  an  expert  engi¬ 
neer  or  supervisor  who  earns  four  thousand  dollars  a  month, 
has  to  produce  by  his  expert  advice  or  organizing  ability,  ten 
thousand  dollars  a  month,  to  earn  the  four  thousand  dollars 
a  month  as  salary,  or  else  he  would  not  be  able  to  hold  his 
place  very  long.  This  is  the  main  feature  of  the  profit  system. 
Thus  the  workers  as  a  whole  are  unable  to  buy  back  the  whole 
of  the  produce.  The  rest  of  the  product  remains  unsold  in  the 
hands  of  the  capitalist  and  constitutes  what  is  popularly  called 
“over  production.”  As  long  as  the  capitalist  is  unable  to  sell 
what  is  already  produced  he  cannot  employ  any  more  labor. 
This  is  the  Anarchist  Theory  of  unemployment.  For  brevity, 
we  will  call  it  “the  Profit-System  I5Theory,” 

19.  In  view  of  the  fact  that  Anarchist  literature  is  gener¬ 
ally  not  very  popular,  and  that  it  is  often  condemned  before  it 
is  read,  I  quote  here  the  following  extracts  of  one  of  the  high- 

15.  This  theory  of  unemployment  wa-s  first  formulated  by  Sis- 
mondi  (who  was  not  an  Anarchist)  in  his  new  principles  in  1819.  He 
might  nevertheless  be  regarded  as  a  forerunner  of  Anarchist  phil¬ 
osophy,  just  as  Rodbertus  is  of  scientific  Socialism.  Rodbertus  i-s 
often  wrongly  given  credit  for  this  theory,  which  was  first  published 
by  Proudhon  ten  years  before  Rodbertus  expounded  his  theory  of 
“over-production  and  crises”  in  his  letter  to  Von  Kirchmann. 


lecture:  i— theory  of  unemployment. 


23 


est  authorities  on  Anarchist  philosophy,  in  support  of  my  pre¬ 
sentation  of  the  Anarchist  theory : 

“However  numerous  the  occupations,  the  econ¬ 
omic  law  remains  the  same — that  the  producer  may 
live,  his  wages  must  repurchase  his  product.  *  *  * 

If  the  working  man  receives  for  his  labor  an  average 
of  three  francs  a  day,  his  employer  (in  order  to  gain 
anything,  beyond  his  own  salary,  if  only  interest  on 
his  capital)  must  sell  the  day's  labor  of  his  employee, 
in  the  form  of  merchandise  for  more  than  three  francs. 

The  working  man  cannot  then  purchase  that  which 
he  has  produced  for  his  master.  It  is  thus  with  all 
trades  whatsoever.  The  tailor,  the  hatter,  the  cabi¬ 
net  maker,  the  blacksmith,  the  tanner,  the  mason,  the 
jeweler,  the  printer,  the  clerk,  etc.,  even  to  the  farm¬ 
er  and  wine-grower,  cannot  repurchase  their  pro¬ 
ducts  ;  since  producing  for  a  master  who  in  one  form 
or  another  makes  profit,  they  are  obliged  to  pay  more 
for  their  own  labor  than  they  get  for  it.  *  *  *  * 

The  laboring  people  can  buy  neither  the  cloth  which 
they  weave,  nor  the  furniture  which  they  manu¬ 
facture,  nor  the  metal  which  they  forge,  nor  the  jewels 
which  they  cut,  nor  the  prints  which  they  engrave. 
They  can  procure  neither  the  wheat  which  they 
plant,  nor  the  wine  which  they  grow,  nor  the  flesh 
of  the  animals  which  they  raise.  They  are  allowed 
neither  to  dwell  in  the  houses  which  they  build,  nor 
to  attend  the  plays  which  their  labor  supports,  nor 
enjoy  the  rest  which  their  bodies  require.  And  why? 
Because  the  right  of  increase  (i.  e.,  profit  system, 
Analyticus)  does  not  permit  these  things  to  be  sold 
at  cost  prices,  which  is  all  that  laborers  can  afford 
to  pay.  *  *  *  Industry  under  the  influence  of 

property  (i.  e.,  profit  system,  Analyticus)  endeavors 
to  produce  a  great  deal  in  a  short  time,  because  the 
greater  the  amount  of  product,  and  the  shorter  the 
time  of  production,  the  less  each  product  costs.  As 
soon  as  a  demand  begins  to  be  felt,  the  factories  fill  up, 
and  everybody  goes  to  work.  Then  business  is  lively, 
and  both  governors  and  governed  rejoice.  But  the 


24 


the:  une:mpix>yme;nt  probtkm. 


more  they  work  today  the  more  idle  they  will  be 
hereafter.  *  *  *  It  is  when  laborers,  whose 
wages  are  scarcely  sufficient  to  support  them  from 
one  day  to  another,  are  thrown  out  of  work,  that  the 
consequences  of  the  principle  of  property  becomes 
most  frightful.  In  proportion  to  the  increase  re¬ 
ceived  by  the  capitalist,  will  be  the  frequency  and 
intensity  of  commercial  .crises.” — Proudhon  :  What 
is  Property.  First  Memoir,  Chapter  IV,  5th  prop. 

Such  then  is  the  Anarchist  theory  of  unemployment ;  is 
it  true? 

20.  It  must  be  admitted  at  the  outset  that  the  theory  is 
very  plausible,  so  plausible  in  fact,  that  the  average  man  in  the 
street,  the  advocate'of  simple  common  sense  as  he  styles  him¬ 
self,  swallows  the  whole  of  it  at  one  gulp  without  waiting  to 
see  what  he  is  doing.  It  has  become  one  of  the  stock  argu¬ 
ments  of  the  soap  box  politician,  and  even  many  of  the 
16Socialist  leaders  who  ought  to  know  better,  have  subscribed 
to  that  theory  with  the  weight  of  their  position  as  leaders. 
Thus  for  once,  the  Anarchist  theory  has  obtained  a  complete 
17victory  over  the  Socialist  philosophy!  This  is  at  least  in  part 
due  to  a  curious  misconception.  There  is  widespread  belief 
among  the  Socialists  that  this  theory  was  originated  and  estab¬ 
lished  b  y  Marx.  Well  then,  if  Marx  is  the  founder  of  the 
theory,  then  that  theory  must  be  all  right,  for  Marx  should 
know.  But  was  Marx  the  founder  or  even  the  “finder”  of  the 
theory?  The  theory  did  not  originate  with  Marx.  Proudhon’s 
first  Memoir  was  published  in  1840,  eight  years  before  Marx 
lifted  his  pen  to  draft  the  “Communist  Manifesto,”  twenty- 
seven  years  before  he  published  his  own  18scientific  theory  of 

16.  Socialists  resent,  with  a  show  of  righteous  indignation,  their 
being  mistaken  for  Anarchists,  for  which  they  themselves  are  to 
blame.  If  they  don’t  like  to  be  taken  for  Anarchists  they  should  not 
parade  with  false  Anarchistic  theories  pinned  on  their  hats.  See  infra, 
para.  21,  and  foot  note  20. 

17.  The  Anarchist  theory  of  unemployment  has  been  accepted 
even  by  the  Industrial  Relations  Commission,  (see  Report  of  Comm, 
on  Industrial  Relations,  page  35.)  The  •Anarchist  philosophy  de¬ 
serves  congratulation-s  for  this  monumental  success!  It  ought  to  make 
Proudhon  smile  even  in  his  grave. 

18.  See  infra.,  paragraph  52,  f.  n.  31. 


LECTURE  I— THEORY  OF  UNEMPLOYMENT. 


25 


unemployment  in  his  immortal  work  “Das  Kapital.”  Marx 
did  not  found  the  theory.  But  he  studied  it, — as  he  studied 
everything  else, — and  found  it  wanting.  Marx  did  not  ad¬ 
vocate  this  theory,  but  he  refuted  and  19repudiated  it  in  the 
most  emphatic  terms. 

“It  is  purely  a  tautology  to  say  that  crises  are 
caused  by  the  scarcity  of  solvent  consumers,  or  of  a 
paying  consumption.  *  *  *  But  if  one  were  to 

attempt  to  cloth  this  tautology  with  a  semblance  of 
a  profounder  justification  by  saying  that  the  work¬ 
ing  class  receive  too  small  a  portion  of  their  own  pro¬ 
duct,  and  the  evil  would  be  remedied  by  giving  them 
a  larger  share  of  it,  or  raising  their  wages,  we  should 
reply  that  crises  are  precisely  always  preceded  by  a 
period  in  which  wages  rise  generally,  and  the  work¬ 
ing  class  actually  get  a  larger  share  of  the  annual 
product  intended  for  consumption.  From  the  point 
of  view  of  the  advocate  of  ‘simple’( !)  common  sense, 
such  a  period  should  rather  remove  a  crisis.” — Marx: 
Capital,  Vol.  II,  page  4 76. 

h  will  be  seen  from  the  above  that  Marx  did  not  advocate 
the  profit  system  theory  of  unemployment.  On  the  contrary 
he  emphatically  repudiated  it.  In  a  footnote  to  the  above 
Engels  also  endorses  Marxian  refutation  of  the  profit  system 
theory. 

19.  Socialist  writers  are  responsible  for  their  irresponsible  ref¬ 
erences  to  Marx,  conveying  the  suggestion  that  Marx  advocated  the 
profit  system  theory.  These  writers  usually  content  themselves  with 
a  general  statement,  coupled  with  a  vague  reference  to  Marx,  unsup¬ 
ported  by  a  citation,  for  example:  Dr.  Hughan  in  her  “American 
Socialism”  refers  to  this  theory  as  being  elaborated  by  Rodbertus, 
and  later  by  Marx.  She  refers  to  “Wage  Labor  and  Capital,”  page  32, 
but  gives  no  quotation.  In  absence  of  a  quotation  the  reader  is  gen¬ 
erally  content  to  accept  the  writer’s  claims  as  being  well  -supported 
wdthout  taking  the  trouble  to  verify  the  given  reference.  Such  a 
reader,  were  he  to  go  so  far  as  to  look  up  page  32  of  “Wage  Labor 
and  Capital”  would  be.  quite  surprised  to  find  that  there  is  not  one 
word  advocating  the  idea  that  the  profit  system  is  the  cause  of 
unemployment.  On  the  contrary  there  is  something  to  point  the 
other. way,  for  in  the  pas-sage  of  Marx  referred  to  by  Dr.  Hughan,  after 
describing  the  evil  effects  of  crises,  Marx  concludes  with  the  remark: 
“and  yet  none  the  less  the  most  fortunate  condition  for  wage  labor 
lies  in  the  speedy  increase  of  capital.” 


THE  UNEMPLOYMENT  PROBLEM. 


26 


21.  But  let  us  be  fair  to  the  anarchist.  The  correctness 
or  incorrectness  of  the  theory  does  not  depend  upon  what 
Marx  or  Engels  said  about  it.  It  must  be  judged  on  its  own 
merits.  As  I  said  before,  the  theory  is  plausible,  but  so  is  the 
over-population  theory  ;  what  does  that  amount  to?  The  theory, 
that  the  earth  is  flat  and  steady  is  plausible,  but  it  requires 
mathematics  and  physics  to  prove  that  it  is  a  rotating  sphere. 
The  Anarchist  theory  (i.  e.,  the  profit  system  theory)  is  plaus¬ 
ible,  but  is  it  true?  Marx  has  shown  that  every  crisis  is  pre¬ 
ceded  by  a  rise  of  wages  and  an  increase  of  purchasing  power. 
It  is  evident  that  unemployment  is  not  the  result  of  diminished 
purchasing  power  of  the  workers.  Among  the  20prominent 
Socialists  who  should  know  better  but  don’t,  and  who  there¬ 
fore  repeat  the  same  old  fallacy,  may  be  mentioned  Victor 
Berger.  The  following  extracts  are  from  his  arguments: 

“The  Exploitation  of  Labor.” 

“Since  the  working  people  do  not  receive  the 
full  value  of  their  products — because  a  considerable 
profit  is  made  by  the  employing' class  on  everything 
the  workers  produce — can  they  be  expected  to  buy 
back  these  products?  *  *  *  In  this  way  the 

laboring  people  not  being  able  to  consume  enough, 
and  by  the  21planless  way  in  which  production  is  car¬ 
ried  on  in  general,  the  so-called  over-production  is 
created.  *  *  *  Of  course  no  matter  how  much 


20.  Even  Allan  Benson,  the  Socialist  Party  candidate  for  Presi¬ 
dent  in  1916,  has  fallen  into  the  same  fatal  error: 

“The  fact  that  the  capitalist  demands  a  profit  upon 
the  worker’s  labor  renders  the  worker  incapable  of  buying  back 

the  very  thing  he  has  made . That  is  why  there  is  not 

always  work  for  all.” — “Truth  About  Socialism,”  page  17. 

This  old  Anarchist  fallacy,  dead  and  buried  by  Marx,  then  again  by 
Engels  in  1885,  and  lastly  with  solemn  funeral  ceremony  at  the  Erfurt 
Congress,  in  1891,  is  once  more  made  to  walk  to  the  street  corners  and 
talk  from  the  soap  boxes  by  "the-very-clearest-and-cleverest-of-aH” 
Socialists. 

21.  There  is  one  spark  of  truth  in  the  Socialist  indictment,  viz., 
that  planless  production  is  a  cause  of  crises  and  unemployment.  Thi-s 
point  will  be  discussed  later.  It  seems  very  strange,  however,  that 
the^  Socialists  •still  place  the  responsibility  for  unemployment  on 
capitalism  when  they  know  that  the  essential  feature  of  capitalism  is 
to  substitute  system  in  place  of  planlessness,  and  order  in  place  of 
chaos.  (See  Kautsky,  “Class  Struggle,”  page  75  et.  seq.) 


LECTURE  I— THEORY  Or  UNEMPLOYMENT. 


27 


or  how  little  the  toilers  of  a  nation  create,  they  al¬ 
ways  create  more  than  they  are  able  to  buy  with  their 
wages,  because  they  have  never  received  the  full  value 
of  their  production.  In  this  way  the  so-called  indus¬ 
trial  crises  originate.  They  have  come  upon  us  about 
once  in  every  22twenty  years,  roughly  speaking,  since 
the  capitalist  production  began  its  way. 

22.  Now  let  us  see  what  that  argument  leads  to.  We  are 
reminded  that  there  is  a  crises  about  once  every  twenty  years ! 
How  about  the  first  eighteen  years  of  each  cycle?  Does  the 
worker  get  the  full  benefit  of  his  production  during  this  fairly 


22.  I.  There  is  a  slight  error  at  this  point.  The  crises  come  once 
in  every  ten  years.  It  was  the  chance  coincidence  of  the  crises  with 
the  sun’s  spots  coming  once  in  every  11J4  years  that  suggested  at: 
one  time  the  sun  spot  theory  of  unemployment.  I  have  never  found 
out  the  reason  why  the  Socialists  always  talk  of  the  20  year  cycle. 
Marx  and  Engels  speak  of  it  as  decennial.  Marx:  Capital,  Vol.  II, 
page  211.  Engels:  Socialism  Utopia  to  Science. 

II.  (By  the  Sec.  Sociology  Club.)  The  crises  as  stated  above 
ccme  nearly  regularly  once  in  every  ten  years,  not  once  in  20  years 
as  the  Socialists  generally  say.  The  difference  is  not  germain  to 
the  theory  under  discussion  and  out  of  courtesy  the  author  has  ignored 
it  in  his  analysis.  We  should  not  have  even  mentioned  it,  except  to 
illustrate  the  carelessness  with  which  the  Socialists  approach  so  im¬ 
portant  a  question.  Among  the  various  references  that  we  have  col¬ 
lected  in  the  course  of  our  study,  the  following  is  the  most  interesting: 

“These  crises  have  appeared  in  their  most  aggrevated 
form  every  twenty  years,  with  supplementary  or  milder 
occasions  in  between,  such  as  the  “Roosevelt’'  panic  of  1907 
and  1908.’’ 

COUNTRY  YEARS  OF  INDUSTRIAL  DEPRESSIONS. 

U.  S.  _ _ _ 1 814  1818  1826 _  1837  1847  1857  1867  1873  1882  1893  1907  1913 

Great  Britain  _ 1815  1818  1826  1830  1837  1847  1857  1866  1873  1883  1893  _  1913 

France  _ 1813  1818  1826  1830  1837  1847  1856  1866  1873  1882  1893  __  1913 

Belgium  _ _ _ _  1837  1847  1855  1873  1882  1893  _ 1913 

Germany _  1837  1847  1855  _  1873  1882  1893  _ 1913 

“Menace  of  Unemployment/’  Winfield  Gaylord. 
With  these  figures  before  him,  Mr.  Gaylord  still  repeats  the 
phrase  “every  twenty  years!”  This  is  not  a  case  of  excusable  ignor¬ 
ance.  It  is  carelessness  pure  and  simple.  It  is  time  that  the  working 
class  aroused  itself  and  endeavored  to  ascertain  whether  the  solu¬ 
tion  of  the  unemployment  problem  can  any  longer  be  trusted  to  people 
who  do  not  know  what  they  are  talking  about,  or  worse  than  that, 
who  do  not  care  to  know.  It  is  an  extremely  dangerous  hazard  to 
trust  the  destiny  of  the  people  to  those  who  are  satisfied  with  “high 
places  in  the  synagogues,”  and  who  will  not  take  the  trouble  to  read 
even  the  writing  on  the  wall. 


28 


the:  unemployment  problem. 


long  period?  No!  On  the  contrary  it  is  just  when  in  the  nine¬ 
teenth  year  his  wages  are  the  highest  and  his  purchasing 
power  is  at  its  best,  that  we  reach  the  beginning  of  a  crises ! 
John  Spargo  has  shown  ("Bitter  Cry  of  the  Children/’  page 
43-44)  that  the  death  rate  of  infants  had  considerably  fallen 
during  the  crisis  of  1871,  when  large  numbers  of  women  were 
thrown  out  of  work.  This  diminution  of  the  death  rate  has 
been  attributed  to  the  better  care  of  infants,  which  care  was 
denied  to  them  before  the  crisis,  when  the  mothers  were  at 
work.  While  as  an  argument  against  female  labor  the  facts 
are  unanswerable,  incidentally  they  prove,  that  the  workers 
can  save  and  do  save  before  the  crises,  and  that  an  exhausted 
purchasing  power  is  therefore  not  the  cause  of  crises. 

23.  And  again,  how  is  it  that  the  period  happens  to  be  so 
nearly  exact  twenty  years?  Why  should  the  purchasing  power 
fail  just  once  in  twenty  years?  We  can’t  even  say  that  it  takes 
nineteen  years  for  the  workers  savings  to  run  out,  because  the 
year  of  industrial  boom  is  the  year  before  the  crisis,  not  the 
year  after.  During  the  nineteen  years,  industry,  and  there¬ 
fore  purchasing  power  of  workers  slowly  but  steadily  in¬ 
creases,  so  that  the  maximum  amount  of  savings  in  the  hands 
of  the  workers  is  just  before  the  crisis,  whereas  that  of  the 
capitalist  is  for  the  same  reason  at  a  minimum  at  this  time. 

"On  the  eve  of  the  crisis  the  bourgeois,  with  the 
self  sufficiency  that  springs  from  intoxicating  pros¬ 
perity,  declares  money  to  be  a  vain  imagination. 
Commodities  alone  are  money.  But  now  the  cry  is 
everywhere,  money  alone  is  commodity.” — Marx, 
Capital,  Vol.  I,  page  155. 

24.  But  the  greatest  weakness  of  the  Anarchist  theory  is 
its  inability  to  explain  how  the  crisis  ends.  Every  crisis  ends 
in  a  year  or  two, — we  know  that;  but  how  does  it  end?  We 
are  told  that  a  crisis  comes  because  the  workers  cannot  buy 
with  their  wages  what  they  have  produced.  If  they  can  not 
buy  what  they  produce  with  the  wages,  when  they  hold  their 
jobs,  they  certainly  could  not  buy  it,  when  they  lose  their 
jobs  and  earn  little  or  no  wages  at  all.  The  Anarchist  (or 
the  Socialist  in  Anarchist  shoes)  tries  to  dodge  out  of  the 
difficulty  by  saying  that  during  the  crisis  the  production  is 


LECTURE  I— THEORY  OF  UNEMPLOYMENT. 


29 


suspended,  or  at  least  diminished,  until  the  accumulated  stock 
is  sold  out.  But  how  is  the  stock  sold?  Who  can  buy  it? 
Even  during  the  crisis  the  wages  are  only  a  part  of  the  produce 
just  as  at  any  other  time.  “No  matter  how  much  or  how 
little  the  toilers  of  a  nation  create,  they  always  create  more 
than  they  are  able  to  buy  back  with  their  wages.”  Therefore 
it  should  be  impossible  to  sell  accumulated  stock  during  the 
crisis,  that  is,  if  the  amount  of  wages  being  lower  than  the 
value  of  the  product,  (or  in  other  words,  if  the  profit  system) 
be  the  cause  of  the  crises.  And  conversely,  since  we  know 
that  every  crisis  ends  somehow,  in  spite  of  the  profit  system, 
that  system  cannot  be  the  cause  of  crises.  The  advocates  of 
that  theory  make  one  more  heroic,  though  not  a  very  scientific 
defence,  by  introducing  the  foreign  markets.  Foreign  mar-^ 
kets !  Where  on  God's  earth  is  the  foreign  country  in  which 
the  workers  do  not  create  more  than  they  receive  as  wages? 
An  absurd  theory  can  only  be  bolstered  up  by  such  absurd  de¬ 
fence.  It  is  a  well  known  fact  that  when  a  crisis  comes,  it 
covers  almost  in  one  day  all  the  countries  of  the  world.  How 
can  the  workers  of  any  one  country  help  those  of  another, 
when  both  are  in  the  same  predicament?  Hence,  the  profit 
system  is  not  the  cause  of  crises,  nor  of  unemployment  which 
constitutes  the  crises.  The  fact  that  the  workers  get  as  wages 
only  a  part  of  the  value  they  produce  is  indisputable.  But  it 
is  not  the  cause  of  unemployment,  however  plausible  the  ex¬ 
planation  may  appear  at  first  sight. 

25.  Another  theory  of  unemployment  is  misapportion- 
ment  of  labor  to  needs.  For  example,  the  needs  of  a  certain 
village  would  be  best  supplied  by  ten  joiners.  If  five  more 
people  take  up  the  miners'  trade,  the  trade  will  be  crowded 
and  some  of  the  joiners  will  be  out  of  work.  Competition 
might  decide  who  will  remain  at  work  and  who  will  not,  but 
some  men  will  have  no  work :  that  is  certain.  This  theory  is 
endorsed  by  the  23Socialists,  and  as  a  remedy  for  the  evil  they 

23.  In  Socialist  literature,  this  is  generally  referred  to  a-s  anarchy 
of  production,  or  planlessness  of  production.  (See  paragraph  21,  f.  n. 
21.)  According  to  Engels  crises  are  caused  by  introduction  of  capi¬ 
talistic  order  in  the  midst  of  social  chaos  and  anarchy,  or  to  quote  the 
classical  formula,  they  are  caused  by  “contrast  between  the  organiza¬ 
tion  of  production  in  the  single  factory  and  the  anarchy  of  production 
in  society  at  large. ” 


30 


THE  UNEMPLOYMENT  PROBLEM, 


propose  that  the  industries  must  be  under  the  control  of  the 
state,  who  will  then  try  to  apportion  the  men  according  to 
the  requirements  of  the  trade.  The  state  control  of  industry 
might  or  might  not  be  the  best  way  to  remedy  the 
evil,  but  we  must  first  try  to  see  whether  misap- 
portionment  is  the  real  cause  of  unemployment.  Ac¬ 
cording  to  this  theory,  one  trade  is  over-manned  at 
the  cost  of  some  other  trade  which  must  necessarily 
be  under-manned.  Unemployment  in  one  trade  will  be  com¬ 
pensated  by  insufficiency  of  help  in  some  other  trade.  Such 
a  state  of  things  is  extremely  unstable ;  if  a  trade  is  insuf¬ 
ficiently  manned,  the  wages  in  that  trade  will  rise  on  account 
of  high  demand  for  labor,  and  the  high  wages  will  attract  more 
men  until  demand  and  supply  are  onbe  more  in  equilibrium. 
Insufficiency  of  help,  whenever  it  occurs,  is  only  a  temporary 
condition,  and  generally  arises  out  of  some  sudden  emergency. 
A  sudden  squall  of  wind  will  heap  up  water  in  a  place,  but  it 
cannot  keep  it  there  very  long,  and  the  process  of  leveling  be¬ 
gins  the  very  moment  the  level  is  disturbed.  In  the  year 
1897  there  was  the  first  outbreak  of  plague  in  India.  The 
demand  for  medical  help  rose  so  high  that  college  boys  who 
had  not  completed  their  course  of  study  were  taken  into  ser¬ 
vice  and  were  paid  salaries  as  high  as  those  of  properly  quali¬ 
fied  doctors.  But  in  two  years  things  settled  down,  and  to-day 
the  medical  profession  is  as  crowded  and  suffering  from  un¬ 
employment  as  it  was  fourteen  years  ago,  though  the  ravages 
of  plague  are  fp  more  extensive  than  when  it  first  began. 
Beveridge,  in  his  lectures  on  unemployment,  shows  by  a  ref¬ 
erence  to  numerous  statistics  that  unemployment  is  not  gen¬ 
erally  limited  to  one  or  two  trades ;  it  always  affects  nearly 
all  trades.  Misapnortionment  of  labor  cannot,  therefore,  be 
the  true  cause  of  ^unemployment. 

26.  Another  well-known  theory  of  unemployment  is  the 

24.  Misapportionment  of  labor,  or  anarchy  of  production,  to  use 
a  more  familiar  formula,  produces  transient  unemployment,  which 
soon  passes  away  under  the  leveling  influence  of  competition.  This 
view  is  endorsed  by  theoretical  scientific  Socialism.  “In  the  totality 
of  this  disorderly  movement,  is  to  be  found  its  order.  Throughout 
these  alternating  movements  in  the  course  of  this  industrial  anarchy, 
competition,  as  it  were,  cancels  one  excess  by  another.’” — Marx: 
“Wage  Labor  and  Capital.” 


LECTURE  I — THEORY  OF  UNEMPLOYMENT. 


31 


land  monopoly  theory  of  Henry  George.  This  is  only  a  modi¬ 
fied  form  of  the  Socialist  theory  of  capitalistic  monopoly  of 
implements.  There  is,  however,  one  important  difference  be¬ 
tween  the  two  theories.  The  Socialist  theory  is  palpably 
wrong.  The  Henry  George  theory  like  the  Anarchist  theory 
is  at  least  plausable.  With  the  exception  of  land,  every  other 
implement  of  labor  is  useful  for  producing  things  having  a 
market  value  only.  The  result  of  the  labor  is  of  no  direct  use 
to  the  worker.  A  shoemaker  can  make  a  hundred  shoes  a 
year,  but  he  cannot  eat  them,  he  cannot  drink  them ;  he  can 
use  only  one,  the  remaining  ninety-nine  are  useful  to  him  only 
if  they  can  be  sold.  If  there  be  no  demand  for  them  he  will 
have  to  remain  unemployed  whether  the  implements  of  labor 
be  free  or  no.  With  land  it  is  altogether  different.  A  man  can 
produce  some  of  the  most  needful  things  with  the  application 
of  labor  to  land  and  live  in  a  state  of  at  least  a  contented 
savage.  The  product  of  his  labor  has  to  him  a  direct  use- 
value,  in  addition  to  market-value,  which  depends  only  on 
demand.  Even  if  there  be  no  demand,  he  may  still  work  and 
produce  in  part  what  he  needs,  if  he  has  land  at  his  disposal ; 
a  man  possessing  land  has  no  excuse  for  being  unemployed. 
To  this  extent,  and  to  this  extent  only,  the  theory  is  true. 
The  mistake  of  Henry  Georgeism  lies  in  the  assumption  that 
all  unemployment  results  from  monopoly  in  land.  There  are 
various  trades  and  professions  that  have  to  depend  upon  the 
market-value  of  the  labor,  the  labor  having  no  direct  use-value 
to  the  worker  himself,  e.  g.,  the  labor  of  a  musician,  a  painter, 
a  juggler,  an  astronomer,  a  teacher,  etc.  These  men  cannot 
earn  a  living  from  land  unless  they  change  their  trade,  which 
is  often  impossible  and  always  impracticable,  or  unless  they 
give  their  land  to  others  for  a  price  or  rent.  But  the  latter 
method  is  admittedly  an  abandonment  of  the  principle  itself. 

27.  The  Henry  George  theory  also  ignores  the  need  of 
preliminary  resources.  Suppose  I  am  out  of  work,  suppose 
also,  that  I  am  both  willing  and  able  to  work  on  land  for  my 
livelihood — which  is  to  suppose  rather  too  much — and  sup* 
pose  now  that  a  few  acres  of  land  are  placed  at  my  disposal  in 
older  to  help  me  out  of  my  unemployment.  How  far  will  it 
help  me?  I  should  still  need  the  implements,  either  crude 


32 


THE  UNEMPLOYMENT  PROBLEM. 


or  improved,  according  to  the  development  of  industry  in  the 
society  where  it  falls  my  lot  to  be.  I  should  need  seed,  grain 
and  other  necessaries  with  which  to  do  my  work.  Lastly  I 
should  need  food,  clothing  and  shelter  with  which  to  sustain 
life.  All  these  things  are  absolutely  essential  for  my  well 
being  before  I  could  reap  the  first  harvest.  For  all  these  the 
Henry  George  theory  makes  no  provision  whatever.  All  these 
things  are  obtained  from  the  land  with  the  help  of  labor. 
Others  can  and  did  obtain  them  before  me  with  nothing  more 
than  labor.  “Here  is  your  land,”  they  say,  “if  you  can't  pro¬ 
duce  what  you  need  and  get  your  living  it  will  be  your  own 
fault.”  Presented  in  this  form,  the  free-land  system  of  Henry 
George  rises  up  1  ike  a  brutal  mockery,  but  I  did  not  intro-  ' 
duce  the  brutality  in  it  for  it  is  inherent  in  the  Henry  George 
philosophy.  I  have  only  brought  to  view  what  was  hidden 
under  the  misleading  doctrine  of  Justice  as  expounded  by 
Henry  George.  Read  his  “Progress  and  Poverty,”  “Free 
Trade”  and  other  well  known  books  and  convince  yourself. 
The  free-land  system — whatever  else  may  be  said  in  favor  of 
that  system — will  not  solve  the  unemployment  problem.  It 
will  only  serve  to  soothe  the  guilty  conscience  of  the  House  of 
Haves,  by  removing  what  in  their  opinion  is  the  only  excuse 
for  revolt  among  the  discontented  army  of  Have-Nots. 

28.  Land  monopoly  is  not  a  cause  of  unemployment, 
whatever  other  sins  we  may  charge  against  it.  It  is  only  a 
possible  cause.  By  this  I  mean  that  the  owners  of  land  could 
create  unemployment  by  virtue  (?)  of  their  ownership  if  they 
were  so  minded,  but  they  are  not  so  minded.  The  motive  for 
owning  land  is  to  earn  profits  without  work.  The  only  way 
to  earn  such  profit  is  by  permitting,  in  fact  by  inducing,  others 
to  work  on  vour  land  on  condition  of  pavment  of  rent.  It  is 
true  that  the  land  owner  refuses  permission  to  use  his  land, 
but  it  is  not  because  he  wants  to  keep  it  idle,  but  because  he 
wants  the  user  to  pay  for  its  use.  The  gate-keeper  at  the 
circus  keeps  out  people  not  because  he  does  not  want  them 
to  go  inside  of  the  tent,  but  because  he  wants  them  to  pay  for 
the  privilege  of  going  in.  He  wished  as  many  to  go  in  as  he 
has  accommodations  for,  onlv  he  wants  them  to  pay  for  the 
privilege.  If  then  the  land-owner  desires  rents  and  the 


LECTURE  I— THEORY  OF  UNEMPLOYMENT. 


33 


-worker  is  willing  to  give  the  rent  and  yet  if  land  and  labor 
remain  unemployed,  the  causes  of  their  unemployment  must 
be  looked  for  somewhere  else.  In  other  words  land  monopoly 
is  not  a  cause  of  unemployment. 

29.  We  have  seen  so  far  that  unemployment  is  not  due 
to  insufficiency  of  work,  or  to  over-population,  or  to  exhaus¬ 
tion  of  resources,  or  to  capitalistic  monopoly  of  land  or  of 
implements  of  work,  nor  to  anarchy  of  production,  except  as  a 
passing  phase.  What  then  is  the  real  cause?  The  immediate 
and  prevailing  cause  of  unemployment  is  a  previous  unem¬ 
ployment.  Like  an  infectious  social  disease  it  passes  from  one 
person  to  another  steadily  increasing  in  virulence  as  it  grows. 
A  is  out  of  work  because  B  is  out  of  work,  B  is  out  of  work 
because  C  is  out  of  work,  and  so  on  without  limit.  There  are 
other  contributory  causes  which  concentrate  unemployment 
at  certain  times  in  certain  localities,  in  an  intensified  condi¬ 
tion,  and  these  causes  are  therefore  regarded  as  the  chief  causes 
of  the  trouble.  For  example,  a  new  invention  may  throw 
thousands  of  workmen  out  of  work.  The  introduction  of  the 
linotype  made  havoc  among  the  compositors.  A  plague  in 
Manchurea,  a  revolution  in  China,  a  famine  in  India,  might,  by 
interfering  with  some  particular  trade,  throw  large  masses  of 
workmen  out  of  work.  But  these  are  only  contributory  causes 
and  must  not  be  allowed  to  mislead  us  in  our  theoretical 
analysis.  The  prevailing  cause  of  unemployment  is  a  ^prev¬ 
ious  unemployment. 

30.  The  one  reason  why  there  has  been  so  little  theo- 
retical  work  with  regard  to  the  unemployment  problem  is  that 
the  attention  of  all  those  concerned  with  the  solution  of  the 
problem  was  taken  up  by  the  practical  solution  of  the  problem, 
and  the  practical  solution  had  reference  to  a  particular  form 
of  unemployment — the  unemployment  of  the  lower  class  of 
waee-earner  who  is  in  need  of  work  for  earning  his  next  meal. 
These  practical  economists  ignore  the  existence  of  an  unem- 
nlovment  of  any  other  kind,  but  the  unemployment  thus 
ignored  is  quantatively  more  extensive  and  in  its  effect  on 
the  economic  and  moral  state  of  society,  of  far  greater  con- 

25.  At  this  stage  we  are  discussing  only  the  immediate  cause, 
"lhe  ultimate  cause  i.  e.,  the  cause  of  the  first  unemployment  will  be 
discussed  later.  (See  paragraph  36). 


34 


THE  UNEMPLOYMENT  PROBLEM. 

sequences  than  the  particular  kind  of  unemployment  that  at¬ 
tracts  our  attention  and  excites  our  sympathy.  The  most 

irritant  poisons  are  not  necessarily  the  deadliest.  The  most 
painful  diseases  are  not  always  the  most  fatal  nor  most  in¬ 
fectious  ;  the  most  heartrending  form  of  unemployment  is 
neither  the  most  dangerous  nor  the  most  extensive.  In  order 
tr  formulate  a  correct  theory  of  unemployment  we  must  begin 
with  the  most  generalized  conception  of  unemployment. 

31.  A  person  is  unemployed  when  he  has  the  will  and 
the  ability  but  not  the  opportunity  to  do  any  particular  kind 
of  work  for  its  equivalent  economic  remuneration.  Unem¬ 
ployment  is  of  two  kinds,  acute  and  chronic.  When  the  un¬ 
employed  person  is  in  need  of  employment  for  the  sake  of 
remuneration,  which  is  needed  for  the  satisfaction  of  some 
urgent  necessity  such  as  food,  clothing,  medicine,  etc.,  the  cor¬ 
responding  unemployment  is  acute.  When  the  person  is  able 
tc  tide  over  the  difficulty  in  any  way  the  corresponding  un¬ 
employment  is  chronic.  Unemployment  changes  its  character, 
and  under  certain  circumstances  transforms  itself  from  acute 
to  chronic  or  from  chronic  to  acute.  Miss  Mule  is  unem¬ 
ployed  and  has  nothing  wherewith  to  buy  a  breakfast  for  her¬ 
self  and  mother.  The  unemployment  is  acute.  A  newspaper 
reporter  gives  her  some  money  to  buy  a  few  meals;  as  long 
as  the  money  lasts  her  unemployment  is  chronic.  Prof. 
Hardhead  loses  his  situation  on  account  of  having  held  cer¬ 
tain  views  in  religion  or  politics.  He  is  unemployed  for  some 
years  and  he  lives  on  his  savings  in  the  meantime;  his  unem¬ 
ployment  is  chronic.  His  savings  are  exhausted;  his  unem¬ 
ployment  is  now  acute.  If  at  this  stage  he  accepts  employ¬ 
ment  as  a  railway  conductor  or  as  a  proof  reader  in  a  press 
with  a  salary  just  sufficient  to  give  him  and  his  wife  two 
meals  a  day,  he  would,  according  to  my  definition,  be  now 
suffering  from  chronic  unemployment.  Or  if  instead,  he  ac¬ 
cepts  an  editorship  of  a  paper  and  writes  for  pay  against  his 
will,,  something  contrary  to  his  convictions  and  gets  for  this 
service  a  very  high  salary,  he  should  still  be  regarded  as  suf¬ 
fering  from  chronic  unemployment — merely  tiding  over  a  dif¬ 
ficulty  by  selling  his  conscience.  To  the  individual  victim  of 
unemployment,  the  acute  type  is  of  more  concern  than  chronic. 
To  a  student  of  economics,  as  to  a  doctor,  the  chronic  type  is 


lecture  i— theory  OF  UNEMPLOYMENT, 


35 


more  important  than  the  acute,  as  it  offers  greater  opportuni¬ 
ties  for  study.  When  people  speak  of  unemployment  they 
have  in  their  mind  only  the  acute  unemployment.  They  are 
generally  unconscious  of  the  existence  of  the  other  type :  this 
is  the  reason  why  no  satisfactory  theory  of  unemployment 
has  been  developed  in  the  past.  With  the  generalized  defini¬ 
tion  given  above,  it  is  easy  to  see  how  unemployment  breeds 
unemployment. 

32.  For  example,  here  is  Mr.  Boots,  with  his  implements 
of  work,  his  brushes  and  polishing  cloth  free  for  his  use.  He 
is  free  to  work  night  and  day,  if  he  chooses,  but  he  has  not 
work  enough  and  most  of  his  time  is  wasted  in  waiting  for 
customers.  He  is  not  altogether  unemployed,  but  the  greater 
part  of  his  time  passes  in  unemployment  because  many  people 
prefer  to  shine  their  own  boots.  What  can  Mr.  Boots  do  dur¬ 
ing  this  enforced  idleness?  He  does  to  others  what  his  possible 
customers  did  to  him.  He  mends  his  shirts,  darns  his  stock¬ 
ings,  and  paints  his  baby’s  carriage.  Thus  he  keeps  a  tailor 
and  a  painter  out  of  work.  Mr.  Tailor  has  a  message  for  a 
friend ;  if  he  had  got  Mr.  Boots’  shirt  for  repairs  he  would 
have  gladly  spent  a  part  of  his  wages  in  talking  over  the  tele¬ 
phone.  But  as  it  is,  he  finds  it  prudent,  and  to  some  extent 
even  necessary,  to  walk  to  his  friend’s  house  and  back,  a 
couple  of  miles,  in  order  to  save  a  nickel.  But  the  nickel  thus 
saved  by  Mr.  Tailor  is  lost  by  the  Telephone  Company.  They 
are  losing  hundreds  of  nickels  every  hour  in-  this  way.  The 
Telephone  Company’s  books  will  show  what  they  earn,  but 
they  have  no  means  to  find  out  how  much  they  fail  to  earn 
through  unemployment.  With  more  employment  of  their 
service  and  more  income  they  might  open  more  stations,  em¬ 
ploy  more  wiremen  to  fit  up  the  stations,  and  more  operators 
to  work  at  the  exchanges.  They  might  also  give  more  em¬ 
ployment  to  manufacturers  of  wires,  poles,  insulators,  trans¬ 
mitters  receivers,  etc.  A  person  who  shines  his  boots  and 
darns  his  stockings  is  keeping  all  these  men  partly  out  of 
work. 

33.  I  do  not  blame  a  person  for  shining  his  boots  any 
more  than  I  could  blame  Mr.  Boots  for  repairing  his  shirts. 
Shining  boots  is  not  only  a  cause,  it  is  also  a  result  of  un¬ 
employment :  unemployment  should  be  traced  backward  as 


36  the  unemployment  problem. 

well  as  forward.  A  man  shines  his  boots  because  somebody 
else  has  kept  him  out  of  work.  Shining  boots  is  not  a  very 
inspiring  work  or  a  pleasant  recreation.  No  person  would  be 
sc  foolish  as  to  save  five  cents  by  shining  his  own  boots,  if 
he  has  an  opportunity  to  do  his  proper  work  and  earn  ten 
cents  during  that  time.  But  he  knows  that  he  has  no  chance 
of  earning  the  ten  cents  for  which  he  has  the  ability  but  not  the 
opportunity,  and  he  wants  to  make  the  next  best  use  of  his 
time  in  saving  five  cents. 

34.  Unemployment  is  an  infectious  social  disease  and 
must  be  treated  as  such.  When  we  speak  of  the  unemployed 
we  are  thinking  only  of  those  who  are  quite  unemployed  for 
a  considerable  period.  We  overlook  the  far  more  important 
and  extensive  unemployment  of  the  partly  employed  and  the 
still  more  serious  unemployment  of  the  misemployed.  Here 
is  a  man  of  great  inventive  powers  capable  of  inventing  a  new 
machine  for  harnessing  the  tides  or  of  discovering  a  new 
chemical  element  harder  than  steel  and  lighter  than  aluminum. 
But  he  has  not  the  opportunity  to  do  it  and  he  is  not  the  sort 
of  man  to  sit  down  and  starve  for  want  of  work ;  so  he  dis¬ 
sipates  his  powers  in  inventing  a  new  advertisement,  or  pros- 
titues  them  forVages,  to  discover  a  flaw  in  the  wording  of  the 
Sherman  act. 

35.  Low  wages  is  only  unemployment  in  disguise  with 
slavery  in  the  bargain !  A  man  who  works  the  whole  time  on 
half  wages  has  really  a  half-time  employment;  he  is  giving  the 
other  half-time  work  gratis  in  order  to  retain  the  half-time 
employment  on  which  his  life  depends.  But  a  man  who  is 
forced  to  work  for  another  without  remuneration  through 
fear  of  some  other  consequences  is  a  slave,  and  all  underpaid 
employees,  whether  hand  worker  or  brain  worker,  are  slaves. 
Even  the  26capitalists  are  slaves — though  through  the  efforts 
of  Socialists  they  have  wrongly  come  to  be  regarded  as  slave 
owners — and  they  cannot  escape  slavery  as  long  as  they  are 
partly  unemployed.  Seen  in  this  light,  unemployment  is  wider 
and  deeper  than  it  appears  at  first  sight.  It  is  a  social  disease 

26.  “I  believe  that  our  general  system  of  wage  slavery  holds  the 
soul  of  the  rich  as  well  as  the  poor  in  bondage. ” — Prof.  Miss  Vida  D. 
Scudder. 


LECTURE  I— THEORY  OF  UNEMPLOYMENT. 


37 


of  universal  extent  and  must  be  treated  by  the  whole  society 
ly  a  united  and  organized  effort 

36.  An  important  and  by  no  means  irrelevant  question 
might  be  asked  at  this  stage  of  analysis:  whence  came  the 
first  germ  of  the  disease?  Like  all  diseases,  it  will  be  found  on 
investigation,  that  the  disease  is  due  to  some  healthful  and 
useful  organ  once  very  serviceable  but  now  no  longer  needed, 
and  that  the  disease  germ  is  related  to  an  innocent  organism, 
which  first  came  into  existence  in  prehistoric  times,  in  much 
the  same  w^ay  as  the  present  scorpion  with  a  venomous  sting 
’  is  related  to  its  stingless  forefathers  of  the  Silurian  age.  Long 
before  the  dawn  of  earliest  civilization,  there  was  more  work 
t .)  be  done  than  man  could  wish  to  do.  The  most  elementary 
comforts  of  life  depended  upon  an  enormous  amount  of  work, 
and  some  means  of  avoiding  work  must  have  been  man’s  per¬ 
petual  care.  The  first  effort  in  this  direction  must  have  been 
an  attempt  to  rob  the  fruits  of  others’  work,  and  for  a  time 
this  act  must  have  been  regarded  as  highly  praiseworthy. 
•Some  reformers  must  have  protested  against  it,  but  this  pro¬ 
test  must  have  been  regarded  at  first  as  a  rebellion  against  “the 
good  old  established  plan,  that  they  might  take  who  have 
power,  and  they  should  keep  who  can.”  I  can  fancy  the  then 
conservative  leaders  of  that  society  justifying  robbery  as  an 
old  and  time-honored  institution,  giving  automatically  to  the 
most  competent  a  reward  for  ability,  and  imposing  upon  every¬ 
body  the  task  of  guarding  their  property  in  order  to  prove 
that  they  deserved  to  keep  it.  They  must  have  argued  that  a 
free  competition  in  trying  to  take  the  fruit  of  other  men’s 
work  tended  to  make  all  men  active,  energetic,  and  watch¬ 
ful.  But  in  spite  of  all  these  specious  arguments,  society  must 
have  come  to  regard  robbery  as  an  evil,  and  laws  to  prevent 
and  punish  it  must  have  been  passed  at  an  early  period  by  a 
nearly  unanimous  consent.  This  was  probably  the  beginning 
of  government.  But  the  problem  of  work  was  still  unsolved, 
laws  against  robbery  being  no  solution  of  the  real  difficulty. 
At  this  point  conservation  of  products  was  an  absolute  neces¬ 
sity  and  thrift  was  therefore  also  necessary.  There  was  prob¬ 
ably  also  another  reason  for  regarding  thrift  as  a  virtue,  but 
we  can  not  discuss  it  at  present.  I  will  take  up  this  question 
In  one  of  the  subsequent  lectures. 


38 


THE  UNEMPLOYMENT  PROBLEM. 


37.  The  next  attempt  must  have  been  in  the  direction  of 
division  of  labor,  and  it  was  certainly  a  move  in  the  right 
direction.  This  most  important  step,  which  was  one  of  the 
earliest  steps  in  the  march  of  civilization,  could  not  have  been 
the  sort  of  deliberately  scientific  development  such  as  is  pre¬ 
sented  to  us  by  the  writers  on  political  economy.  It  must 
have  resulted  as  a  sort  of  compromise  in  the  mutual  attempts 
of  two  persons  to  take  the  fruits  of  each  other’s  work.  It 
was  taking  the  fruit  of  other  men’s  work  by  taking  the  other 
man’s  work  itself.  Whatever  the  genesis  of  the  system  might 
be,  it  carried  within  itself  the  germs  of  two  great  social  evils, 
(1)  The  tendency  towards  a  competitive  monopoly,  and  (2) 
The  tendency  towards  unemployment.  It  required  certain 
conditions  offered  by  modern  civilization  to  develop  these 
evils.  But  the  tendencies  have  always  been  there  awaiting' 
their  time  of  fulfilment.  I  am  not  arguing  against  division 
of  labor.  In  spite  of  the  two  great  evils  that  have  grown 
out  of  it,  it  is  without  doubt  the  foundation  of  all  civilization, 
modern,  ancient,  and  prehistoric.  As  to  the  evils,  but  for 
certain  conditions  peculiar  to  our  modern  civilization,  the 
germ  could  never  have  grown  into  a  disease,  and  even  now  it 
is  not  difficult  to  stamp  out  the  disease,  without  in  any  way 
interfering  with  civilization.  It  is  no  part  of  my  work  here  to 
trace  the  evolution  of  competitive  monopoly  out  of  division 
of  labor,  but  as  to  unemployment  it  is  not  difficult  to  trace  the 
eariler  steps  of  its  evolutuion. 

38.  Division  of  labor  consists  of  a  man  taking  another 
man’s  work  in  preference  to  his  doing  his  own  work.  A 
farmer  has  his  plough  broken  during  work ;  to  repair  it  is  now 
his  most  important  work,  but  he  prefers  to  hand  over  his  work: 
to  another  farmer  and  takes  instead  his  work  of  raising  for 
him  a  few  bushels  of  wheat.  To  the  second  farmer  whom  we 
will  hereafter  call  the  joiner,  repairing  the  farmer’s  plough  is 
easier  than  his  own  work  of  ploughing  his  own  field.  To 
the  first  farmer,  ploughing  the  joiners  field  is  easier  than  his 
own  work  of  repairing  his  own  plough.  In  this  way  work  in 
a  society  begins  to  be  divided  into  kinds,  and  one  man  does 
only  one  kind  of  work  not  only  to  satisfy  his  own  needs,  but 
also  needs  of  others  for  a  remuneration.  Such  a  system  of 
dividing  work  into  kinds,  is  called  division  of  labor.  The  sys- 


LECTURE  1— ’ THEORY  OF  UNEMPLOYMENT. 


39 


tem  is  morally  just  and  economically  sound,  but  in  so  far  as  it 
consists  of  taking  another  man’s  work,  it  contains  the  germ 
of  unemployment  The  system  ceases  to1  be  morally  just  when 
the  two  works  exchanged  are  economically  unequal  and  the 
exchange  is  brought  about  under  circumstances  giving  one 
party  an  unfair  advantage  over  the  other.  It  also  ceases  to 
be  economically  sound  when  the  work  is  so  distributed  that 
some  people  remain  without  work,  for  a  corresponding  wealth- 
producing  power  is  wasted  by  want  of  use,  or  still  further  by 
misuse.  It  is  bad  enough  when  a  few  million  laborers  are 
out  of  work,  but  it  becomes  immeasurably  worse  when  even 
a  single  brain  worker  is  out  of  work.  The  possibilities  of 
human  brain  are  beyond  calculation.  Genius  grows  in  the 
palace  and  in  the  slums.  Who  can  tell  how  much  the  world 
has  lost  by  stifling  genius?  Who  can  measure  the  harm  done 
by  misdirected  genius?  For  every  Edison  the  world  got,  it 
has  probably  lost  a  thousand  who  might  have  been  the  bene¬ 
factors  of  the  world,  but  who  are  today  some  of  our  daring 
criminals,  'either  in  the  jail  or  at  large  preying  on  society  by 
lawful  crimes.  In  our  modern  society  the  system  of  division 
of  labor  has  reached  a  phase  in  which  both  these  evils,  the 
moral  and  economic,  are  strongly  developed :  The  germ  has 
grown  into  a  malignant  disease.  In  uncivilized  state,  the  germ 
cannot  grow,  for  in  spite  of  division,  work  is  still  so  laborious 
that  no  person  can  wish  or  hope  to  take  work  of  more  than  a 
few  men  at  a  time.  No  farmer  could  undertake  to  plough  for 
more  than  a  dozen  men;  no  joiner  could  undertake  to  repair 
more  than  a  dozen  ploughs  a  da}^.  In  a  civilized  society  it  be¬ 
comes  possible  for  one  man  to  do  some  kinds  of  work  for  a 
thousand  or  even  for  a  million  men  at  a  time.  This  method 
of  taking  other  men’s  work  may  be  perfectly  legitimate  as  far 
as  the  existing  laws  are  concerned,  but  the  resulting  unem¬ 
ployment  is  none  the  less  an  evil  and  must  be  removed.  It  is 
not  necessary  to  give  up  division  of  labor  and  turn  back  from 
civilization  to  barbarism.  All  that  is  necessary  to  readjust 
the  state  of  things,  so  that  the  system  should  be  once  more 
just  and  economic,  is  to  revise  the  laws  in  such  a  way  that  no 
person  should  be  unemployed  and  a  burden  on  others,  unless 
by  some  disability  he  is  unable  to  do  any  sort  of  work.  There 
is  no  need  to  do  anything  in  particular  to  secure  fairness  and 


40 


THE  UNEMPLOYMENT  PROBLEM, 


equity  in  exchange.  With  abolition  of  unemployment  the 
natural  law  of  exchange  will  automatically  adjust  itself  ap- 
proximately  to  the  requirements  of  equity. 

39.  But  before  proposing  any  practical  scheme  of  reformr 
we  must  try  to  see  why  a  healthy  institution  was  converted 
into  a  seat  of  disease.  Without  this  investigation  the  theory 
would  be  incomplete,  and  we  should  have  no  guarantee  that 
the  reform  scheme  might  not  miscarry  and  prove  a  source  of 
unforeseen  dangers.  It  is  a  well-known  fact  that  organs  which 
were  at  one  time  useful  members  of  the  body,  but  whichr 
under  altered  conditions,  have  ceased  to  be  of  any  use,  gen¬ 
erally  become  sources  of  disease.  The  tonsils  and  the  vermi¬ 
form  appendix  are  well-known  illustrations.  We  find  similar 
phenomena  in  religions,  social  organizations,  and  politics. 
The  Levitical  law  was  meant  to  fulfill  a  real  want,  and  there 
is  no  doubt  that  during  the  exile,  and  for  some  years  after  the 
return,  it  did  its  duty  well.  But  in  course  of  time  it  ceased 
to  be  of  any  use,  corruption  set  in,  worship  became  a  farce, 
and  the  temple  was  turned  into  a  market  place.  Prophet  after 
prophet  tried  to  introduce  a  reform  without  any  success,  until 
at  last  the  Prophet  of  Prophets  demolished  the  temple  and 
substituted  in  its  place  a  worship  in  spirit  and  truth.  The 
caste  system  among  the  Hindus  must  have  at  one  time  sup¬ 
plied  a  real  social  and  economic  need,  somewhat  like  the  craft 
unions  among  the  European  races,  but  in  course  of  time  the 
need  passed  away,  and  the  system  has  for  a  long  time  served 
a  very  useful  purpose  in  the  hands  of  foreign  conquerers  to 
split  up  the  country,  “to  divide  and  rule.”  In  politics,  the 
feudal  system  was  an  important  step  towards  a  settled  gov¬ 
ernment,  but  in  course  of  time  the  system  became  a  danger, 
and  in  all  countries  it  had  to  be  abolished  in  order  to  establish 
a  centralized  government. 

40.  In  economics,  too,  we  have  a  similar  phenomenon. 
At  one  time  in  the  evolution  of  society  thrift  served  an  extreme¬ 
ly  useful  purpose  and  was  rightly  regarded  a  social  and 
economic  virtue.  To-day,  under  an  altered  condition  of  so¬ 
ciety,  it  has  ceased  to  be  social  virtue  and  has  a  very  ques¬ 
tionable  economic  value.  This  social  supposedly  organ — thrift 
— once  very  useful  but  now  needless,  has  become,  under  indiv¬ 
idual  control,  the  seat  of  a  disease,  viz.,  unemployed.  But 


LECTURE  I— THEORY  OF  UNEMPLOYMENT, 


41 


popular  opinion  with  its  immense  conservatism  still  regards 
thrift  as  a  virtue  and  it  is  therefore  necessary  to  examine  this 
claim  closely  with  an  unbiased  mind. 

41.  27Thrift  consists  of  two  factors,  industry  and  econ¬ 
omy.  Industry,  as  opposed  to  laziness,  is  certainly  a  virtue 
and  will  always  remain  a  virtue.  Economy  as  opposed  to  dis¬ 
sipation  is  also  a  virtue.  The  unscientific  critic  generally  stops 
at  this  stage.  But  as  students  of  scientific  analysis  we  must 
go  another  step.  Is  industry  opposed,  to  laziness  alone?  Is 
there  no_  third  alternative?  A  man  wants  to  work  and  can¬ 
not  get  it.  He  cannot  be  regarded  as  industrious,  for  he  is 
not  working,  nor  can  he  be  called  lazy,  for  he  is  willing  to 
work  and  is  making  every  possible  effort  to  get  work.  To  tell 
a  man  to  be  thrifty  (i.  e.,  industrious)  when  you  know  that  he 
cannot  find  work  is  simply  adding  an  insult  to  his  injuries. 
The  advise  to  be  “thrifty”  implies  that  there  is  available  work  ; 
when  no  work  is  available  the  word  “thrifty”  has  no  meaning, 
and  having  no  meaning  at  all,  it  cannot  signify  a  virtue.  There 
was  a  time  when  labor  saving  devices  were  unknown,  and 
when  there  was  lots  of  work  to  do  for  anyone  who  wished  to 
work.  Only  a  lazy  man  could  be  without  work;  the  indus¬ 
trious  thrived  and  thrift  came  to  be  regarded  as  a  virtue.  That, 
a  man  willing  to  work  would  not  be  able  to  get  a  chance  to 
work  was  at  that  time  beyond  the  possibility  of  thought. 
But  the  state  of  thines  is  changed ;  men  are  hunting  for  work 
and  cannot  find  it.  Under  these  circumstances  thrift  has  be¬ 
come  meaningless.  It  no  longer  represents  a  social  virtue. 

42.  Though  in  the  sense  of  industry  “thrift”  has  ceased 
tc  be  a  virtue,  it  is  at  least  not  a  vice.  It  is  meaningless ;  that 
Is  the  worst  that  can  be  said  about  it.  But  in  the  sense  of 
‘economy”  it  has  not  only  ceased  to  be  a  virtue  but  has  been 
transformed  into  a  social  vice.  When  we  speak  of  economy 
A-e  are  thinking  of  something  as  opposed  to  waste.  Waste  is 
>f  two  kinds,  (1)  waste  which  profits  nobodv,  and  (2)  waste 
'hi ch  profits  somebody.  A  typical  illustration  of  the  first  is 
he  popular  anecdote  of  Baron  Rothschild  entertaining  Queen 
Victoria  with  a  cup  of  tea  which  cost  him  £20.000.  The  Baron 

27.  The  word  “thrift”  is  ambiguous.  It  sometimes  means  indus- 

rv  and  economy  as  denned  above,  and  sometimes  only  economy, 
n  all  cases  the  context  shows  in  what  sense  the  world  is  used 


42 


THE  UNEMPLOYMENT  PROBLEM. 


is  said  to  have  burned  £20,000  in  Bank  of  England  notes  to 
prepare  the  cup.  “What  a  foolish  and  wicked  waste/'  says  the 
indignant  apostle  of  thrift.  As  to  whether  the  waste  was 
foolish  or  no,  the  Baron  is  the  best  judge,  for  he  nfcist  have 
known  what  he  was  going  to  earn  by  such  a  flattering  com¬ 
pliment  to  the  Queen  Empress.  But  as  to  the  waste  being 
wicked,  I  fail  to  see  any  wickedness  in  it.  Would  it  have  been 
a  wicked  act  if  the  Baron  had  presented  the  Bank  of  Eng¬ 
land  with  a  purse  of  $20,000.  How  could  the  same  act  be 
wicked  merely  because  it  was  done  in  an  indirect  way?  Gen¬ 
erally  a  deliberate  waste  which  profits  nobody,  also  hanns 
nobody,  and  there  is  not  need  to  discuss  it  any  further,  'Isec- 
ondly,  such  waste  is  extremely  rare ;  it  is  not  the  kind  of  waste 
we  are  thinking  of  when  we  talk  of  thrift. 

43.  The  second  kind  of  waste  consists  of  spending  money 
for  things  or  services  which  could  be  dispensed  with.  A  man 
may  do  without  a  cigar,  he  may  live  on  oatmeal  and  pota¬ 
toes,  he  may  walk  instead  of  riding  on  a  car ;  he  may  shine 
his  boots  and  shave  his  beard,  he  may  read  his  papers  in  a  free 
public  library  or  read  none  at  all.  The  poor  in  this  country 
generally  practice  so  much  thrift  without  deriving  much  bene¬ 
fit  thereby.  Assuming  that  he  has  the  means,  he  may  go  even 
further — he  may  do  without  most'  of  the  furniture  and  sit 
cross-legged  on  the  floor  like  a  Turk  or  eat  his  food  with  his 
fingers  like  a  Hindu.  But  now,  assuming  that  all  the  people 
of  the  United  States  practice  thrift  like  this,  will  it  make  the 
country  rich  and  prosperous?  Could  the  Evening  Pdst  boast 
of  a  circulation  about  two  millions  every  week  if  every  one 
limited  himself  to  reading  only  what  is  necessary?  What 
would  become  of  the  spoon  and  fork  factories  if  all  the  people 
in  this  country  should  start  eating  with  their  fingers?  Thrift 
is  an  excellent  thing  to  preach  as  long  as  you  are  sure  of  its 
not  being  practiced.  Let  the  people  of  the  United  States 
start  practicing  it,  and  within  twelve  months  it  will  be  one  of 
the  most  miserable  countries  in  the  world.  The  Hindus  are 
the  most  economic  race  of  people  in  the  world,  but  they  are 
neither  rich  nor  prosperous.  If  people  in  this  country  dress  in 
plain  clothes  of  cheaper  material,  what  will  become  of  the  fac¬ 
tories  and  clothing  stores?  If  they  give  up  smoking,  hof(T  many 
tobacconists  can  escape  ruin?  If  they  abstain  from  all  needless 


I  ECTURE  I— THEORY  OR  UNEMPLOYMENT. 


43 


luxuries,  the  portrait  painters,  piano  makers,  and  lace  weav¬ 
ers  will  all  be  swept  away. 

44.  “Thrift”  is  only  another  way  of  spelling  “unemploy¬ 
ment.”  Every  time  I  shave  my  beard. I  keep  the  barber  out 
o4*  employment.  Every  cigar  that  I  do  not  smoke  is  so  much 
unemployment  to  the  cigar-manufacturer.  The  very  essence 
of  thrift  is  to  give  as  little  employment  to  others  as  you  can. 
So  long  as  man  was  in  an  uncivilized  state  thrift  was  a  virtue, 
for  it  then  served  a  very  useful  purpose  of  economizing  labor. 
It  was  the  only  way  of  saving  labor.  Division  of  labor  was, 
as  stated  before,  the  first  step  in  civilization.  “Thrift,”  which 
hadnffp  to  this  point  served  a  very  useful  purpose,  now  began 
to  be  useless  and  only  became  an  obstacle  in  the  way  of  civ¬ 
ilization.  For,  civilization  required  mutual  employment. 
“Thrift,”  by  which  I  mean  individual  thrift,  stood  for  mutual 
unemployment.  Out  of  these  opposing  forces  there  arose  a 
tendency  to  obtain  employment  from  others  by  every  possible 
means,  without  giving  employment  to  others  in  return.  In 
the  earlier  days  of  civilization  the  tendency  could  not  grow 
into  a  disease,  for  nobody  could  wish  to  get  from  others  more 
work  than  he  could  do,  and  he  could  not  do  much.  With 
modern  civilization  and  increased  working  power  of  the  in¬ 
dividual,  taking  other  people's  work  in  large  quantities  has 
become  possible,  and  unemployment,  both  chronic  and  acute, 
has  been  the  result.  A  civilized  society  that  tries  to  depend 
upon  thrift  cannot  escape  unemployment,  and  the  more  the 
advance ^rn  civilization  the  more  the  unemployment),  both 
chronic  and  acute.  It  is  the  inevitable  result  of  trying  to  live 
like  savages  under  conditions  of  the  most  advanced  civiliza¬ 
tion.  Thrift  is  opposed  to  division  of  labor,  and  therefore  to 
that  extent  contradicts  itself  and  defeats  its  own  purpose.  A 
tailor  who  shaves  himself  to  save  a  dime,  spends  much  more 
than  the  dime's  worth  of  time  and  labor  than  a  barber  would, 
and  a  barber  who  makes  for  himself  a  shirt  will  waste  more 
cloth,  time,  and  labor  than  a  tailor  would,  and  yet  the  leaders 
of  our  modern  civilization  advise  the  barber  to  make  his  shirt, 
and  the  tailor  to  shave  his  beard,  and  call  it  “thrift !” 

45.  At  this  stage  I  must  guard  myself  against  a  possible 
and  likely  misinterpretation ;  anybody  might  hastily  infer  that 
I  advoeate  a  lazy,  improvident  mode  of  life  as  a  solution  of 


44 


THE  UNEMPLOYMENT  PROBLEM. 


our  present  economic  difficulties.  I  advocate  nothing  of  the 
sort.  That  I  am  opposed  to  thrift  being  regarded  as  a  social 
virtue  and  social  ideal  is  a  fact,  but  I  would  not  advise  any  per¬ 
son  to  give  up  thrift  on  that  account.  How  I  propose  to  get 
rid  of  thrift  I  need  not  say  at  this  stage.  I  will  deal  with  the 
question  in  its  proper  place  under  “Cure  for  Unemployment.” 
It  is  sufficient  at  this  stage  to  say  what  I  do  not  intend  to 
advise.  I  do  not  advise  anybody  to  abandon  thrift,  it  would 
be  simply  economic  suicide.  Any  person  who  spends  more 
than  he  needs  will  not  reform  society.  He  will  only  bring  him¬ 
self  to  the  end  of  his  resources  and  lose  even  the  small  power 
he  possesses,  of  effecting  some  kind  of  reform.  No  person 
can  hope  to  achieve  anything  by  abandoning  thrift  in  a  world 
which  regards  it  as  an  ideal.  An  advice  to  abandon  thrift 
would  be  like  an  advice  to  an  Arabian  Bedouin  to  go  about  un¬ 
armed.  Nor  again  would  I  advise  society  as  a  whole  to  give 
up  thrift  and  by  “a  gentlemen’s  agreement”  to  spend  to  the 
fullest  extent  of  its  power.  One  single  thrifty  man  in  such 
a  society  would  reduce  the  whole  society  to  servitude  unless 
in  the  meantime  the  others  change  their  minds  and  go  back 
to  thrift. 

46.  Thrift,  i.  e.  individual  thrift,  is  to  the  individual  in 
economic  warfare  what  armies  and  ammunition  are  to  govern¬ 
ment  in  international  warfare.  Everybody  knows  that  these 
ever-increasing  armies  wdiich  have  nearly  transformed 
Europe  into  a  military  camp  are  serious  evils  to-day  and  a 
source  of  greatest  possible  danger  in  future,  and  yet  no  sen- 
s;ble  statesman  will  recommend  a  policy  of  disarmament. 
Every  reason  that  is  good  against  a  policy  of  disarmament  for 
any  nation  is  also  a  good  reason  against  a  policy  of  abandon¬ 
ing  thrift.  Whichever  method  ultimately  succeeds  in  reduc¬ 
ing  the  armaments  will  also  with  due  adaptations  succeed  in 
abolishing  thrift  and  putting  an  end  to  unemployment.  The 
two  problems  are  strictly  analogous,  and  anybody  who  has 
studied  the  disarmament  problem  can  have  no  difficulty  in 
anticipating  my  solution  of  the  unemployment  problem. 
Thrift  has  to  be  abolished,  but  it  cannot  be  abandoned.  In 
many  countries  nobody  is  allowed  to  go  about  with  arms,  but 
in  a  society  where  going  about  with  guns  and  shooting  your 


lecture  i— theory  of  UNEMPEOYMENT. 


45 


opponent  or  rival  on  least  provocation  is  considered  lawful 
and  meritorious,  no  man  would  think  of  advising  his  friend  to 
go  out  unarmed.  In  such  a  society  you  can  imagine  a  man 
preaching  against  the  custom  of  the  free  use  of  arms.  He 
might  work  hard  to  introduce  a  law  to  prevent  the  use  of  arms 
by  citizens,  but  as  long  as  the  law  remains  unchanged,  he 
will  neither  go  out  unarmed  himself  nor  advise  others  to  do 
it.  I  do  not  want  thrift  to  be  abandoned  by  anybody.  I  want 
it  to  be  abolished  by  way  of  proper  and  practical  constitutional 
reform. 

47.  But  there  is  another  and  a  stronger  reason  for  my 
not  advocating  the  policy  of  “spend  all  you  earn.”  It  will  not 
solve  the  unemployment  problem.  It  is  true  that  saving 
causes  unemployment,  but  it  does  not  follow  conversely  that 
spending  all  one  earns  will  put  an  end  to  unemployment. 
Converse  propositions  are  not  necessarily  true.  If  you  play 
with  a  gambler  as  skillful  as  yourself,  but  not  as  honest,  and 
if  he  uses  marked  cards  and  loaded  dice  you  are  pretty  sure  to 
lose ;  but  it  does  not  follow  conversely  that  if  he  does  not  use 
dishonest  methods  that  you  will  surely  win.  You  might  win 
and  you  might  not,  for  it  is  now  a  matter  of  chance,  and  the 
probability  is  that  an  honest  player  will  sometimes  win  and 
sometimes  lose.  Or,  take  another  illustration :  If  I  take  a  few 
grains  of  potash  cynide  this  evening  I  will  not  be  living  to¬ 
morrow  morning.  That  is  a  matter  of  absolute  certainty  with¬ 
in  the  limits  of  human  knowledge.  But  if  I  do  not  take  the 
cynide  to-night  is  there  any  guarantee  of  my  living  to¬ 
morrow?  I  might  be  bitten  by  a  crait  in  my  bed.  I  might  be 
shot  by  a  loyal  and  patriotic  gun-man.  I  might  be  run  down 
by  a  careless  chauffer  or  get  drowned  in  the  river  on  my  way 
home.  Then  again,  there  is  the  possibility  of  death  by  heart 
failure  and  other  internal  troubles.  Life  depends  upon  the 
proper  equilibrium  of  protoplasmic  activities  maintained  by 
proper  functioning  of  all  the  organs  and  parts  of  organs.  Any¬ 
thing  that  seriously  interferes  with  any  of  those  functions  will 
'  cause  death.  Cynide  causes  death  because  it  interferes  with 
one  of  those  functions.  But  there  would  be  death  even  if  there 
were  no  such  thing  in  the  whole  world  as  cynide,  because  there 
|  are  other  things  that  interfere  with  some  function.  In  the 


46 


TH E  UNEMPLOYMENT  PROBLEM. 


same  way,  while  thrift  practiced  by  the  individual  must  surely 
cause  unemployment,  it  by  no  means  follows  that  if  thrift 
were  not  practiced  by  the  individual  it  will  lead  to  the  end  of 
unemployment.  To  illustrate  this  point,  let  us  assume  a  small 
community  of  but  five  persons.  For  simplification  we  will 
call  them  A,  B,  C,  D  and  E.  If  one  of  these  saves  he  creates 
unemployment.  This  fact  is  so  obvious  that  I  need  not  take 
time  to  illustrate  the  point.  But  now  let  us  assume  that  every 
one  spends  all  he  earns,  will  that  make  unemployment  im¬ 
possible?  If  each  of  them  bought  from  all  the  others  and  in 
proportion  to  what  each  of  the  others  produced  there  would 
be  no  unemployment.  But  the  mere  fact  that  each  of  the  five 
individuals  spends  all  his  earnings  carries  with  it  no  guarantee 
as  to  how  it  will  be  spent.  The  other  two  conditions  (1) 
buying  from  all,  and  (2)  buying  from  all  in  proportion  to  the 
producer’s  product,  may  not  be  fulfilled ;  there  is  at  least  no 
guarantee  of  such  fulfillment.  On  the  contrary,  if  left  to 
chance,  the  probability  is  that  there  will  be  unemployment 
e\en  if  the  people  spend  all  they  earn.  For  example*  suppose 
A  buys  from  B,  C  and  D,  but  not  fromE ;  B  buys  from  A,  C 
and  D  but  again  not  from  E  and  so  on.  In  that  case  E  will  be 
unemployed  although  A,  B,  C  and  D  and  even  E  spend  every 
cent  they  earn.  Unemployment  caused  by  chance  will  not 
probably  be  so  extensive  at  first  as  when  it  is  manufactured 
systematically  by  the  deliberate  exercise  of  thrift.  But  there 
will  still  be  some  unemployment  caused  by  the  haphazard 
distribution  of  work  by  indiscriminately  spending  money.  A 
little  unemployment  will  cause  more  unemployment  and  com¬ 
pel  everybody  to  revert  to  thrift  which  will  bring  them  right 
back  to  their  starting  point.  Indiscriminate  spending  is  no 
remedy  against  unemployment  and  I  therefore  do  not  advocate 
abandonment  of  thrift  by  individuals.  It  is  no  solution  to  the 
unemployment  problem.  Incidentally  let  us  note  that  anarchy 
of  consumption  is  only  a  possible,  and  not  an  essential  cause 
of  unemployment.  This  fact  must  be  kept  in  view  in  devising 
a  solution  of  the  unemployment  problem. 

48.  This  brings  up  once  more  the  Socialist  theory  of 
anarchy  of  production,  to  the  “planless  way  in  which  produc¬ 
tion  is  carried  on”  as  being  the  cause  of  unemployment.  (See 


LECTURE  I— theory  of  unemployment. 


47 


para.  21.)  This  view  formulated  by  28Engels  is  one  of  the 
leading  propositions  in  the  theory  of  scientific  Socialism. 
That  this  proposition  contains  a  spark  of  truth  is  cheerfully 
admitted,  but  it  contains  just  a  spark  and  no  more.  I  have 
already  shown  how  anarchy  of  consumption  may  cause,  and 
in  fact  does  cause  unemployment.  Now  consumption  must  by 
its  very  nature  be  anarchic,  for  the  purpose  of  consumption  is 
the  gratification  of  desire.  As  long  as  desire  is  free  and 
unfettered  by  law,  consumption  must  be  anarchic,  that  is ; 
uncontrolled  by  law  and  unregulated  except  by  circumstances, 
-such  as  inability  to  procure  or  consume.  The  ultimate  pur¬ 
pose  of  ail  production  is  consumption.  Therefore  the  more 
perfectly  it  is  adjusted  to  the  needs  of  the  consumer,  the 
more  anarchic  it  appears  to  be.  This  is  why  capitalist  pro¬ 
duction  appears  to  be  anarchic,  just  in  proportion  as  it  elim¬ 
inates  chaos  and  introduces  order.  Imagine  a  hound  chasing 
a  very  lively  hare  on  a  moorland  in  which  there  are  many 
places  for  the  hare  to  hide.  Suppose  the  hare  to  be  visable 
to  the  hound  but  not  to  the  spectators  watching  the  chase. 
The  hare  runs,  stops,  turns,  and  dodges  in  all  possible  ways, 
controlled  by  no  motive  except  the  desire  to  maintain  its  free¬ 
dom.  The  movements  of  the  hound  are  controlled  by  those 
of  the  hare,  but  to  an  observer  who  cannot  see  the  hare,  the 
hound  seems  to  follow  no  law  whatever,  and  the  more  closely 
the  hound  follows  the  hare  the  more  erratic  his  movements 
seem  to  be.  The  anarchy  of  production  is  only  an  apparent 
anarchy,  the  apparition  being  due  to  the  efforts  of  capitalism 
to  keep  pace  with  consumption  which  is  truly  anarchic  and 
follows  no  law.  Understood  in  this  sense,  anarchy  of  produc¬ 
tion  is  no  doubt  the  cause  of  unemployment  and  to  this  extent 
the  Socialists  are  right.  But  when,  from  this  premise  they 
jump  to  the  conclusion  that  capitalism  is  the  cause  of  un¬ 
employment,  they  are  entirely  off  the  track.  Capitalism  did 
not  create  the  anarchy  ;  the  anarchy  was  there  to  start  with  : 
capitalism  introduced  order,  removed  chaos  to  a  large  extent 
and  diminished  anarchy.  It  is  the  height  of  absurdity  to 
accuse  capitalism  of  having  created  an  evil  which  it  did  not 

28.  “Organization  of  production  in  single  factory,  and  the 
anarchy  of  production  in  -society  at  large.” — Engels:  Socialism' 
Utopian  and  Scientific. 


48 


the:  unemployment  problem. 


create,  but  which,  on  the  contrary,  it  has  done  something  to  re¬ 
move  !  The  service  of  capitalism  in  this  respect  is  frankly 
recognized  and  fearlessly  acknowledged  by  some  of  the  high¬ 
est  exponents  of  modern  scientific  Socialism. 

“It  (speculation)  is  a  necessary  function  of  the 
capitalist.  By  speculating  *  *  *  the  merchant 

helps  to  bring  some  order  into  the  chaos  of  the  plan¬ 
less  system  of  prodution  that  is  carried  on  by  in¬ 
dividually  independent  concerns.” — Kautsky,  Class 
Struggle  (Erfurt  programme,  page  75.) 

Though  Kautsky  uses  the  merchant  as  an  illustration,  the 
argument  is  applicable  to  all  forms  of  capitalism,  including 
industrial  capitalism. 

49.  Nor  should  I  be  understood  to  mean  that  thrift  can 
never  be  a  virtue.  There  was  a  time  when  it  was  a  virtue,  and 
the  time  will  come  when  it  will  be  a  virtue  29again,  but  it  is 
not  a  virtue  to-day,  and  until  the  last  willing  worker  has 
found  employment  thrift  cannot  be  a  virtue,  whatever  else  it 
might  be.  Ingratitude  can  never  be  a  virtue,  and  in  our  so¬ 
ciety  as  it  is  to-day  thrift  is  the  worst  form  of  ingratitude ; 
for  a  thrifty  man  obtains  his  opportunity  to  work  from  some¬ 
body,  then  denies  an  equal  opportunity  to  others,  by  practic¬ 
ing  economy,  i.  e.,  by  refusing  to  employ  others.  Not  content 
with  this,  he  turns  round  and  reproves  the  needy  for  their 
thriftlessness,  i.  e.,  for  their  having  given  him  the  opportun¬ 
ity  whereby  he  had  earned  his  income.  Thrift  is  unchristian. 
It  is  easier  for  a  camel  to  pass  through  the  eye  of  a  needle, 
than  for  a  rich  man  to  enter  the  Kingdom  of  God.  A  rich 
man  is  only  a  successful  thrifty  man,  for  it  is  not  a  man  who 
merely  earns  a  large  income  that  is  rich,  but  a  man  who  saves 
much.  Here  is  the  explanation  of  what  puzzles  people  so 
much :  Why  should  Jesus  be  so  hard  against  a  rich  man 
simply  because  he  is  rich?  A  man  cannot  be  rich  without 
being  thrifty,  i.  e.,  without  ingratitude.  Thrift  is  the  cause  of 
poverty.  There  is  no  possible  way  of  producing  wealth  ex¬ 
cept  by  work ;  there  is  no  possible  way  of  practicing  economy 
in  our  society  except  by  preventing  work,  i.  e.,  by  keeping 
some  person  out  of  work.  A  man  may  spend  money  in  a 

29.  This  point  will  be  considered  in  the  second  and  subsequent' 
lectures. 


LECTURE  I— THEORY  OF  UNEMPLOYMENT. 


49 


good  way  or  in  a  bad  way,  but  there  is  only  one  way  of  saving 
money,  and  it  is  the  evil  way  at  present — the  way  that  leads 
to  unemployment  and  poverty.  There  is  a  poular  miscon¬ 
ception  that  saving  is  equivalent  to  increase  of  wealth ;  it  is 
not.  It  was  so  in  the  remote  past  in  savage  society  where  every 
man  worked  for  himself ;  if  he  saved  anything  at  all  it  was 
something  that  was  produced.  A  savage  fisherman  who 
catches  ten  fish  and  eats  nine,  saves  one  fish.  Next  morning 
he  is  richer  by  one  fish,  and  he  can  now  spend  a  part  of  his 
time  in  building  a  boat  or  some  other  form  of  wealth.  If 
every  savage  in  that  society,  or  group,  did  the  same,  the 
wealth  of  the  whole  group  would  be  increased.  In  this  way 
the  more  they  save  the  wealthier  they  grow.  In  a  civilized 
society  where  division  of  labor  is  the  predominating  mode 
of  production,  saving  has  a  diametrically  opposite  effect.  In 
such  a  society  a  thrifty  fisherman  does  not  save  his  fish ;  he 
sells  all  his  fish  and  saves  the  money.  Suppose  he  sells  his 
fish  to  a  joiner,  but  refuses  to  buy  chains,  tables,  and  other  fur¬ 
niture  in  return.  It  would  not  increase  the  wealth  of  the 
joiner;  it  will  prevent  production  of  furniture  and  keep  him 
poor.  For  in  this  case  saving  does  not  consist  of  saving  of 
produced  wealth  but  of  refusal  of  opportunity  to  produce. 
Lack  of  opportunity  to  produce  is  unemployment,  with  pov¬ 
erty  as  a  by-product. 

50.  Closely  connected  with  the  problem  of  poverty  is  the 
problem  of  high-cost-of-living.  In  spite  of  what  economists 
the  thriftists  have  to  say  on  this  point,  I  claim  that  high  cost 
of  living-  has  nothing  to  do  with  protection  or  free  trade;  it 
has  nothing  to  do  with  manufacturers  or  middlemen ;  it  has 
nothing  to  do  with  trusts  or  watered  stocks ;  it  has  nothing 
to  do  with  taxes  or  with  military  expenditures ;  it  has  nothing 
to  do  with  the  luxury  or  the  extravagance  of  the  rich,  or 
with  the  drunkenness  or  improvidence  of  the  poor ;  it  has  noth¬ 
ing  to  do  with  sun  spots  or  any  other  nebulous  theory.  There 
is  one,  and  only  one,  cause  of  high  cost  of  living,  and  that 
cause  is  thrift.  This  can  be  easily  proved,  but  considering  the 
importance  of  the  subject,  I  have  made  this  proposition  the 
basis  of  a  whole  lecture  by  itself  which  will  be  placed  before 
the  public  in  due  time. 

51.  To  sum  up:  Unemployment  breeds  unemployment. 


50 


THE  UNEMPLOYMENT  PROBLEM. 


The  motive  for  keeping  others  out  of  employment  has  its  roots 
in  the  instinct  of  individual  thrift  that  was  developed  in  pre¬ 
civilization  times.  It  was  a  savage  instinct,  and,  like  fierce¬ 
ness  in  the  struggle  for  life  and  sex,  was  a  savage  virtue. 
With  the  advent  of  civilization  it  was  no  longer  needed,  but 
like  everything  else  it  was  allowed  to  stay.  It  opposed  civ¬ 
ilization  in  its  infancy  and  has  now  become  the  source  of  the 
greatest  dangers  to  modern  civilized  society;  in  fact  it 
threatens  the  very  existence  of  civilization  to-day.  Trans¬ 
formation  of  thrift  into  unemployment  was  an  inevitable  step 
ir  the  process  of  evolution.  Thrift  alone  without  division  of 
labor  could  not  have  given  rise  to  unemployment.  Division 
of  labor  made  the  transformation  possible;  modern  civiliza¬ 
tion,  by  carrying  division  of  labor  to  the  highest  point  of 
productive  efficiency,  has  made  the  transformation  inevitable. 
Thus  we  arrive  at  the  following  conclusions : 

1.  Unemployment  in  the  final  analysis  is  the  re¬ 
sult  of  the  discordant  combination  of  two  conflicting 
and  mutually  exclusive  ideals,  civilization  with 
division  of  labor  based  on  mutual  employment  as  a 
socializing  ideal,  and  individual  thrift  based  on 
mutual  non-employment  as  an  anti-social,  individual 
ideal. 

2.  Unemployment  causes  further  unemploy¬ 
ment.  This  is  the  theory  of  unemployment. 

52.  The  same  conclusion,  viz.,  that  thrift  is  the  cause  of 
unemployment,  can  be  directly  deduced  as  a  corollary  from 
the  theory  of  work.  Work  in  any  country  at  any  time  is 
made  up  of  two  factors : 

Number  of  people  x  average  need  per  head. 

This  quantity  is  the  consuming  function  of  a  nation.  The 
producing  power  of  a  nation  is  also  made  up  of  two  factors: 
Number  of  people  x  average  ability  per  head. 

(a)  For  equilibrium,  the  production  and  consumption 
must  be  equal.  Hence  we  obtain  the  equation 
population  x  average  need 

^population  x  average  ability. 

It  will  be  seen  that  the  factor  “population”  is  common 
to  both  sides  and  cancels  itself.  It  follows  from  this  that  in¬ 
dustrial  equilibrium  is  independent  of  population. 


LECTURE  I — -THEORY  OF  UNEMPLOYMENT. 


51 


(b)  Any  permanent  excess  of  consumption  over  produc¬ 
tion  is  obviously  impossible,  for  nobody  can  consume  what  is 
not  produced. 

(c)  In  a  society  where  division  of  labor  is  the  estab¬ 
lished  mode  of  production,  excess  of  30production  over  con¬ 
sumption  leads  to  unemployment.  This  excess  may  be  brought 
about  in  two  ways;  first,  by  increase  of  ability  per  head — 
which  means  increased  industry,  and,  second,  by  decrease  of 
need  per  head— which  means  economy  of  consumption  by 
practicing  individual  abstinence.  The  two  together  jointly 
constitute  individual  thrift;  therefore  individual  31thrift  is  the 
cause  of  unemployment.  Machinery  is  often  referred  to  as  a 
cause  of  unemployment.  This  is  no  doubt  true ;  it  is  only  a 
particular  case  of  the  general  proposition  that  individual  thrift 
is  the  cause  of  unemployment.  Machinery  is  only  human 
labor  materialized  in  a  specific  form  for  the  purpose  of  produc¬ 
ing  utimately,  greatest  possible  produce  with  least  possible 
labor.  It  is,  to  borrow  a  Marxian  phrase,  congealed  thrift. 
But  while  it  is  true  that  machinery  causes  unemployment,  it 
does  not  follow  from  it,  that  capitalistic  ownership  of  machin¬ 
ery  is  also  a  cause  of  unemployment.  I  have  already  proved 
that  it  is  not.  On  the  contrary,  it  can  be  shown  that  capital¬ 
istic  ownership,  counteracts  to  certain  extent,  the  unemploy¬ 
ment  caused  by  machinery.  This  point  wil  lbe  discussed  later. 
(See  Lecture  V,  Capitalism:  Profit  System). 

30.  The  excess  of  production  or  “over-production”  as  it  is  popu¬ 
larly  called  is  only  apparent.  There  is  no  real  over-production  worth 
mentioning.  (See  supra  paragraph  48.) 

31.  “No  one  can  sell  unless  some  one  else  purchases.  But  no 

one  is  forthwith  bound  to  purchase,  because  he  has  just  sold . 

If  the  interval  in  time  between  the  two  complementary  phases  of  the 
complete  metamorphosis  of  a  commodity  becomes  too  great,  if  the 
split  between  the  sale  and  the  purchase,  becomes  too  pronounced, 
the  intimate  connection  between  them,  their  oneness,  asserts  itself 
by  producing — a  crisis.” — Marx:  Capital  Vol  I,  pages  127-128. 

This  is  only  the-  Marxian  way  of  saying  that  if  a  man  practices 
thrift, — if  he  earns  money  and  does  not  spend  it — he  creates  unem¬ 
ployment.  See  also  Kautsky,  Class  Struggle,  page  73.  In  Vol.  IT  of 
Capital,  Marx  also  propounded  another  theory  of  crises,  viz.,  cyclic 
res-enerat’on  of  implements  of  production.  This  theory  has  never  been 
recognized  even  by  the  Socialists;  it  is  therefore  not  necessary  to  dis¬ 
cuss  it  here.  (See  Capital,  Vol.  II,  page  211.) 


52 


the:  unemployment  problem. 


53.  Unemployment  is  the  Devil's  Workshop.  Most  of 
the  social,  religious,  and  political  evils  are  manufactured  in 
this  workshop.  It  is  unemployment  that  transforms  a  priest 
into  a  blackmailer  and  a  temple  into  a  market-place.  Unem¬ 
ployment  is  at  the  root  of  the  32wage-slavery  of  the  workman 
and  the  profit-s’avery  of  the  capitalist.  It  is  the  root  of  the 
modern  class  struggle  between  the  Proletariat  and  the  Barons 
or  Industry.  The  sweat-shops  and  sharkj-dens  are  all  founded 
on  unemployment.  It  is  responsible  fdr  women  labor  and 
child  labor.  It  is  responsible  for  all  sorts  of  corruption :  the 
buying  and  selling  of  votes  in  politics,  the  buying  and  selling 
of  justice  in  the  courts,  buying  and  selling  of  salvation  in  the 
church,  buying  and  selling  of  husbands  and  wives  in  social 
transactions.  It  is  responsible  for  the  Boer  war  in  Africa, 
Russo-Japanese  war  in  Asia,  and  embryonic  33 Anglo-German 
war  in  Europe.  The  advocates  of  thrift,  will  H aye  much  to 
answer  for  when  the  tirfie  of  reckoning  ^ofries.  The  phrase, 
“War  is  hell"  has  become  a  proverb;  but  what  is  thrift?  It 
is  economic  war.  It  consists  of  industry  ai^fl  economy;  ac¬ 
cording  to  the  first  requirements  you  try  to  take  as  much 
employment  from  others  as  you  can:  this  is  industry.  With 
a  system  of  division  of  labor  such  as  we  are  living  under,  in¬ 
dustry  depends  upon  mutual  employment.  According  to  the 
second,  your  aim  is  to  give  the  least  possible  employment  to 
others:  this  is  economy,  which  depends  upon  mutual  non¬ 
employment.  When  everybody  practices  thrift  it  becomes  a 
general  economic  warfare.  Everybody  wants  work,  but  no¬ 
body  wants  to  give  work  to  others  and  nobody  can  hope  to 
get  it  from  another  unless  he  can  drive  somebody  into  a 
corner  and  compel  him  to  give  it.  A  thrifty  people  is  a  people 
in  a  state  of  perpetual  warfare.  What  is  Hell?  It  is  the 
Devil's  Workshop.  Thus  we  arrive  at  the  conclusion  that 


32.  Here  and  elsewhere  I  have  used  the  word  “wage-slavery”  in 
its  popular  sense  only.  I  mention  this  in  anticipation  of  any  apparent 
contradiction  in  the  subsequent  lectures  wherein  I  hope  to  prove  that 
there  is  no  -such  thing  as  wage-slavery  and  that  what  we  call  “wage- 
slavery”  is  really  an  escaoe  from  slavery. 

32.  This  was  written  in  1911  and  published  first  in  1912. 


LECTURE  i— theory  oe  unemployment. 


53 


'^Thrift,  alias  Unemplyoment,  is  the  Devil's  workshop  where- 
r.  the  greatest  of  our  modern  social  evils  are  forged.  Take, 
!or  instance,  one  of  the  most  painful  ulcers  at  the  heart  of 
modern  civilized  society,  the  white  slave.  Every  link  of  the 
:ursed  chain  that  binds  the  helpless  and  hopeless  victims  of 
:his  most  disgraceful  form  of  slavery  is  manufactured  in  “un¬ 
employment/'  It  is  despair  of  escape  from  unemployment 
:hat  drives  the  victims  to  the  traps,  and  to  the  subsequent 
slavery  of  the  most  degraded  type.  It  is  unemployment 
:hat  drives  the  hunters  of  women  to  set  the  traps,  in  order  to 
earn  a  living  and  to  escape  unemployment.  The  evils  of 
inemployment  are  often  supposed  to  be  well  understood: 
they  are  not,  they  are  scarcely  beginning  to  be  understood. 
When  the  full  measure  of  the  evil  is  understood  and  realized, 
no  sacrifice  will  be  regarded  too  great  to  stamp  it  out. 

UNEMPLOYMENT  MUST  BE  DESTROYED. 


34.  “The  identification  of  depression  in  trade  with  insufficient 
:onsumption,  or  excess  thrift,  is  we  venture  to  assert  unassailable. 

...  It  means  that  the  East-end  problem  with  its  concomitants 
)f  vice  and  misery,  is  traced  to  its  economic  cause,  and  that  this 
Konomic  cause  is  the  most  respectable  and  highly  extolled  virtue 
yf  thrift.” — Mummery  and  Hobson:  “The  Physiology  of  Industry. 


The  Rights  of  the  Unemployed. 

LECTURE  II. 

1.  “Therefore  all  things  whatsoever  ye  would  that  men  should 
do  to  you,  do  ye  even  so  to  them;  for  this  is  the  law  and  the  prophets.”’ 
—Matthew:  VII-12. 

2.  ‘'Be  not  deceived:  God  is  not  mocked;  for  whatsoever  a  mars 
soweth,  that  he  shall  also  reap.”— Epistle  to  Galatians:  VI-7. 

54.  In  the  first  lecture  I  have  shown:— 

(a)  That  unemployment  is  not  caused  by  insufficiency 

of  work,  over  population,  failure  of  natural  re¬ 
sources,  capitalistic  monopoly  of  implements  of 
work,  or  monopoly  in  ownership  of  land. 

(b)  That  the  immediate  and  prevailing  cause  of  unem¬ 

ployment  is  a  previous  unemployment. 

c)  That  anarchy  of  production  is  only  an  apparent 
phenomena  which  has  no  real  existence;  the  ap- 
perance  is  caused  by  the  unrecognized  existence  of 
anarchy  of  consumption.  Anarchy  of  consumption 
is  a  possible  but  not  a  necessary  cause  of  unem¬ 
ployment. 

(d)  That  the  ultimate  cause  of  unemployment  is  the  dis¬ 
cordant  combination  of  the  two  conflicting  and 
mutually  exclusive  ideals ;  civilization  with  division 
of  labor  (based  on  mutual  employment)  as  a  social 
ideal ;  and  thrift  (based  on  mutual  unemployment) 
as  an  individual  ideal. 

With  these  theoretical  premises  to  start  with  we  are  now 
in  a  position  to  formulate  at  least  a  plausible  remedy  for 
u  nemploy  ment. 

55.  It  is  easy  to  see  that  any  solution  by  way  of  re¬ 
stricting  immigration,  or  by  increasing  efficiency  of  the  less 
efficient  workers  is  impossible.  That  such  impossible  solu¬ 
tions  should  have  been  seriously  suggested  might  seem  a  mat¬ 
ter  of  surprise  if  we  had  never  heard  of  men  spending  their 
lives  in  achieving  perpetual  motion.  Their  zeal  is  commend¬ 
able,  but  zeal  alone  cannot  transmute  unscientific  nonsense 
into  scientific  truth.  The  same  remark  applies  to  other  fall- 


lecture  II— the  rights  oe  THE  UNEMPLOYED.  55 

acies,  such  as  those  based  on  ownership  of  land  or  capital. 
The  last  mentioned  method  may  have  the  effect  of  diminish¬ 
ing  the  extent  and  mitigating  the  rigours  of  unemployment  for 
a  time,  but  the  relief  will  be  of  short  duration.  The  small 
amount  of  unemployment  left  over  will  act  as  a  new  centre 
of  disease,  and  from  this  spot,  unemployment  will  begin  to 
grow  again  so  that  in  a  few  years  things  will  be  as  bad  as 
they  are  to-day,  for  the  simple  reason  that  the  real  cause  of 
unemployment  will  have  been  left  untouched  and  unsuspected ; 
untouched  because  unsuspected. 

56.  Unemployment  creates  further  unemployment  wilich 
creates  still  more  unemployment  and  so  on  without  end.  Any 
partial  solution  of  the  problem  must  therefore,  necessarily  fail. 
A '  complete  solution  is  the  only  legitimate  solution.  Any 
other  solution  is  as  good  as  none  at  all ;  for,  given  a  small 
amount  of  unemployment,  however  diminutive  at  first,  general 
unemployment  is  but  a  short  step.  The  amount  of  time 
necessary  for  the  full  development  of  the  evil  being  dependent 
upon  the  phase  of  civilization  reached  by  the  people  at  that 
time.  In  a  country  like  the  United  States,  if  99  per  cent,  of 
the  unemployed  were  put  to  work  to-day,  leaving  but  1  per 
cent,  unemployed  against  their  will,  this  1  per  cent,  will  rapidly 
create  more  unemployment  and  within  10  years  the  nation  will 
be  in  exactly  the  same  condition  as  it  is  to-day.  A  complete 
solution  is  the  only  possible  solution.  That  is,  if  the  theory 
of  the  causes  of  unemployment  be  true.  But  none  of  the  ex¬ 
isting  schools  of  philosophy  have  yet  felt  the  need  of  a  com¬ 
plete  and  radical  change  in  this  respect.  The  solution,  what¬ 
ever  it  be,  must  be  of  a  permanent  standing  character,  opera¬ 
tive  at  all  time;  we  cannot,  for  example,  relieve  all  the  unem¬ 
ployed  in  existence  for  the  time,  consider  the  problem  as  solved 
and  rest  on  our  oars.  For,  in  any  free  society,  anarchy  of 
consumption  will  and  must  always  exist.  This  is  a  permanent 
cause  of  unemployment,  which  cannot  be  counteracted,  and 
therefore  in  this  case  unemployment  cannot  be  prevented  at 
the  source.  We  can  only  remedy  the  evil  as  fast  as  it  is 
created,  but  this  could  be  done  only  if  the  solution  is  of  a  per¬ 
manent  standing  character. 

57.  The  ultimate  cause  of  unemployment  is  the  com¬ 
bination  of  division  of  labor  and  thrift.  Here  is  where  we 


56 


THE  UNEMPLOYMENT  PROBLEM, 


should  look  for  the  correct  solution.  It  is  not  possible,  nor  is 
it  necessary  to  give  up  division  of  labor;  division  of  labor 
alone  by  itself  is  not  the  cause  of  unemployment.  Similarly,, 
it  is  neither  possible  nor  necessary  to  abandon  thrift;  thrift 
alone  could  not  and  did  not  create  unemployment.  It  is  the 
combination  of  the  two,  or  rather  the  discordant  character  of 
these  two  conflicting  ideals,  that  is  responsible  for  the  eviL 
It  is  not  necessary  to  abandon  either  of  them  to  remedy  un¬ 
employment.  We  must  modify  the  character  of  the  combina¬ 
tion  :  that  is  all.  Division  of  labor  is  a  social  ideal  and  thrift,  in 
its  present  form,  is  an  individual  ideal.  The  contradictory 
character  of  the  two  ideals  is  the  source  of  the  trouble.  Of  ^ 
these  two,  division  of  labor  must  be  left  as  it  is,  for  by  its 
nature  it  is  social,  and  it  cannot  be  changed  to  anything  else. 
Thus  after  eliminating  all  other  alternatives,  we  find  only 
one  alternative  available,  viz.,  to  change  the  character  of  thrift 
from  individual  to  social.  This  then  must  be  the  solution 
and  very  probably  the  only  practicable  solution,  that  is  if 
there  is  any  solution  at  all,  assuming  of  course,  that  the  theory 
of  unemployment  formulated  above  be  true.  Is  such  a  change 
possible,  and  is  it  practicable?  Collective  thrift  in  place  of 
individual  thrift;  can  that  be  done? 

58.  It  certainly  is  not  impossible,  for  we  are  doing  it  in 
some  of  our  affairs  to-day.  Our  life  insurance,  fire  insurance 
and  all  other  insurance  schemes  are  living  examples  of  the 
practicability  of  collective  thrift.  Why  could  we  not  extend' 
the  principle  to  unemployment  insurance?  Why  could  not 
members  of  society  save  for  a  common  future  need,  instead  of 
each  individual  trying  to  save  for  his  personal  need?  There 
is  one  serious  objection  to  this  method.  In  the  case  of  insur¬ 
ing  houses  against  fire,  those  who  need  insurance  most,  are 
also  best  able  to  pay  for  the  protection,  while  those  who  are 
unable  to  pay  have  no  houses  to  insure  and  therefore  do  not 
have  to  pay.  Hence  the  system  adjusts  itself  automatically 
to  the  needs  of  society.  But  in  the  case  of  unemployment  it 
is  exactly  the  reverse ;  those  who  need  the  insurance  most  are 
the  least  able  to  pay  for  it,  while  those  who  are  best  able  to 
pay  need  it  the  least.  Collective  thrift  for  insurance  against 
unemployment  is  not  a  self-adjusting  machine.  It  must  there¬ 
fore  ;  be  controlled,  regulated  and  maintained  artificially,  ex- 


lecture  II— the  rights  oe  the  UNEMPLOYED* 


5? 


actly  as  we  do  in  other  similar  cases.  Our  judicial  system  is  a 
collective  insurance  against  injustice,  (sometimes  it  is  merely 
a  farce  and  a  caricature,  but  for  the  purpose  of  our  present 
analysis  it  is  not  necessary  to  refer  to  the  weak  spots  of  the 
system).  The  judicial  system  is,  as. I  have  said,  an  insurance, 
but  it  is  not  run  on  commercial  lines  as  in  the  case  of  fire  in¬ 
surance.  The  man  who  pays  the  most  does  not  get  the  best 
out  of  it;  at  least  that  is  the  presumption.  Imagine  what 
kind  of  justice  we  would  have  in  a  society,  where  justice  is 
manipulated  along  commercial  lines,  and  where  the  quantity 
and  quality  of  the  justice  delivered  is  proportional  to  the  price 
demanded  and  paid,  or  demanded  and  not  paid !  Justice,  as  the 
product  of  our  courts  is  a  case  of  compulsory  collectivism  on 
strictly  communistic  lines;  each  individual  being  compelled 
to  pay  according  to  his  ability  and  allowed  to  receive  accord¬ 
ing  to  his  need.  The  scheme  for  insurance  against  unemploy¬ 
ment  must  be  worked  out  on  the  same  basis.  It  must  be  a 
compulsory  insurance  wherein  each  member  of  society  will 
have  to  pay  according  to  his  ability  to  pay,  and  each  mem¬ 
ber  will  receive  as  much  employment  as  he  needs  or  desires, 
and  of  the  kind  that  he  desires  and  is  qualified  for.  This  is  the 
conclusion  we  have  arrived  at  as  the  result  of  the  theory  of 
unemployment,  and  it  remains  now  only  to  formulate  a  prac¬ 
ticable  scheme  wherein  these  principles  may  be  incorporated. 
Incidentally,  we  will  also  have  to  investigate  the  claims  of 
the  unemployed.  Is  the  claim  of  a  man  to  get  a  job  in  any 
way  analogous  to  his  right  to  get  justice  in  the  courts  of 
judicature?  On  the  answer  of  this  question  will  depend  the 
ethical  merit  of  the  scheme. 

59.  The  scheme  of  reform  that  I  intend  to  propose  tenta¬ 
tively  is  the  Guaranteed  Employment  Scheme.  It  consists  of  r 

(1)  The  formation  of  a  department  of  state:  The  Guar¬ 
anteed  Employment  Bureau.  This  bureau  will  give  to  any 
person  willing  to  work,  on  receiving  his  application,  real  or 
nominal  employment,  according  to  his  trade,  profession  or 
attainment.  The  salary  will  commence  from  the  date  of  re¬ 
ceiving  the  application. 

(2)  The  employment  will  not  depend  on  whether  or  not 
there  is  available  work.  Work  or  no  work;  every  applicant 

1.  See  infra,  paragraph  93. 


38 


the:  une:mployment  problem. 


will  receive  employment  upon  receipt  of  his  application.  If 
there  be  work,  he  will  have  to  do  it.  If  not,  he  will  still  get  his 
regular  wages  and  will  be  expected  to  hold  himself  in  readi¬ 
ness  for  work  whenever  there  is  work  to  be  done. 

(3)  If  the  bureau  can  find  work  enough  to  keep  the  whole 
force  profitably  employed,  the  bureau  will  be  self  supporting. 
But  if  there  be  no  work  for  the  whole  or  even  for  a  part  of  the 
force  employed,  the  corresponding  wages  will  be  a  loss  to  the 
State.  This  loss  will  be  made  up  by  adequate  and  equitable 
taxes  assessed  for  the  purpose. 

(4)  These  taxes  (called  the  Guaranteed  Employment 
Fund)  will  consist  of : 

(a)  Foreign  import  duties  and  patent  fees. 

(b)  Income  tax  on  wages  of  wage  earner.  (Note:  For 
purposes  of  taxation,  a  minimum  amount  of  living  expense 
will  de  deducted  from  the  wages  before  calculation  of  assess¬ 
ment). 

(c)  Income  tax  on  rents,  profits  and  interest.  (Note: 
Profits  and  dividends,  if  reinvested  will  be  exempt  from  tax  for 
this  purpose.) 

(d)  Taxes  on  increments  of  values  of  land,  and  other 
natural  resources. 

(5)  The  working  details  of  the  scheme  will  be  drawn 
'up  by  a  properly  constituted  committee  and  will  be  revised* 
'From  time  to  time  as  necessary. 

60.  At  first  sight  this  scheme  appears  to  be  absurd,  un¬ 
just  and  impracticable.  I  have  discussed  it  with  my  friends 
and  acquaintances  here  and  elsewhere,  and  such  has  been  in¬ 
variably  the  first  criticism.  But  after  arguing  my  case  for 
some  time  1  have  always  succeeded  in  obtaining  a  complete  or 
nearly  complete  approval.  I  therefore  feel  encouraged  to  place 
this  scheme  before  the  citizens  of  the  United  States  of  America 
with  a  view  to  give  it  a  practical  trial.  I  believe  that  the 
citizen  of  the  United  States  may  be  trusted  to  do  it  such 
justice  as  it  deserves.  But  before  dealing  with  the  merits  of 
the  scheme  I  must  answer  the  objections  against  it. 

61.  The  scheme  is  said  to  be  “absurd.”  It  is  not  absurd; 
it  cannot  be  absurd  as  it  is  the  logical  and  necessary  outcome 
of  the  theory  of  unemployment.  If  the  theory  be  right,  the 
scheme  cannot  be  wrong.  It  seems  that  when  people  say  “ab- 


lecture:  II— the  rights  of  the  UNEMPLOYED. 


59 


surd”  they  do  not  mean  absurd  in  the  logical  sense,  but  merely 
something  strange  unheard  of  or  unusual.  There  is  really 
no  need  of  arguing  over  so  hazy  and  unintelligible  an  objection. 
Nevertheless,  to  do  full  justice  to  this  objection,  I  must 
frankly  admit  that  the  scheme  appears  very  unlike  the  other 
schemes  that  have  been  proposed  from  time  to  time  in  the 
past.  It  does  not  sound  heroic  for  there  is  no  mention  of 
“sabotage/'  confiscation  or  class  struggle,  no  thunderous  de¬ 
nunciation  of  “malefactors  of  great  wealth/'  It  promises  to 
better  the  condition  of  the  already  over-taxed  workers  by  add- 
irg  to  the  burden  of  their  taxes.  It  promises  to  inaugurate 
economic  equality  by  making  the  sky-high  profits  of  the  rich 
exempt  from  taxation.  It  should  not  be  surprising  if  at  first 
the  proposition  should  be  pronounced  absurd.  My  duty  is  to 
prevent  its  being  killed  by  popular  prejudice  without  a  trial  be¬ 
fore  the  tribunal  of  scientific  reasoning. 

62.  Every  new  scheme  has  had  to  face  that  self-same 
danger.  Many  of  the  greatest  achievements  in  history  and 
science  were  at  first  ruled  out  as  being  absurd.  The  areo- 
plane,  the  telephone,  and  the  photograph  were  all  “absurd/* 
When  M.  Lesseps  proposed  the  construction  of  the  Suez 
Canal  his  scheme  was  called  absurd.  When  Westinghouse 
endeavored  to  market  the  air-brake  he  was  laughed  at  for  the 
“absurd"  idea  of  stopping  a  railway  train  in  full  speed  by 
blowing  a  few  puffs  of  vacuum !  It  is  the  same  story  once 
more;  the  t  ew  scheme  is  always  absurd.  In  the  fifteenth  cen¬ 
tury  Columbus  discovered  America.  The  discovery  of  America 
was  of  course  an  accident,  for  nobody  knew  before,  that  this 
continent  was  here.  Columbus  was  trying  to  reach  India  by 
tiavelling  westward.  Everybody  said  that  the  scheme  was 
absurd.  India  is  to  the  East  of  Europe,  so  how  could  it  be 
reached  by  going  West!  To  the  people  who  knew  nothing  of 
theory  the  world  was  flat  because  it  appeared  flat.  If  the 
earth  were  flat  as  they  supposed  it  to  be,  an  eastern  country 
could  not  be  reached  by  going  west.  To  be  sure  the  scheme 
was  absurd!  To  Columbus  who  had  given  more  attention  to 
theory,  the  world  was  round  and  the  success  of  his  scheme 
Was  assured  even  before  it  was  attempted. 

63.  If  the  theory  of  unemployment  thus  far  expounded 
be  correct,  then  it  must  be  admitted  that  the  solution  of  the 


60 


THE  UNEMPLOYMENT  PROBLEM. 


problem  under  discussion  is  not  only  a  solution,  but  it  is  the 
only  correct  solution.  If,  on  the  contrary  the  theory  be  wrong, 
then  the  whole  solution  goes  overboard  and  there  will  be  no 
further  need  to  discuss  it.  The  question  of  absurdity  or 
Validity  of  the  Solution  is  therefore  not  a  legitimate  ques¬ 
tion  until  the  validity  of  the  theory  is  either  proved  or  dis¬ 
approved.  The  theory  is  at  all  times  open  to  criticism  and 
revision.  In  the  mean  time  while  the  theory  remains  un¬ 
challenged  we  shall  have  to  proceed  on  the  supposition  that  it 
is  valid,  and  therefore  that  the  solution  indicated  by  the  theory 
is  not  absurd.  It  must  be  understood  that  this  conclusion 
refers  to  the  general  nature  of  the  solution,  but  not  to  details. 
From  his  theory  Columbus  inferred  that  it  was  possible  to 
reach  India  by  sailing  westward,  but  that  theory  did  not  tell 
him  what  kind  of  a  ship  he  should  sail  in,  how  it  should  be 
provisioned  or  what  was  the  best  season  to  start  the  voyage, 
Neither  did  it  give  him  any  indication  of  the  unexpected  dif¬ 
ficulties  that  might  stand  in  his  way  and  block  his  passage 
to  India  by  the  western  route  as  the  subsequently  discovered 
continent  of  America  ultimately  did.  Questions  of  details  re¬ 
quire  separate  study. 

64.  The  scheme  is  said  to  be  unjust.  “Is  it  not  unjust,” 
savs  the  wage  earner,  “to  make  a  working  man  pay  a  part  of 
his  hard  earned  income  to  another  man  for  doing  nothing?” 

Before  answering  this  objection  I  must  protest  against  the 
Words  in  which  the  objection  is  expressed.  I  take  objection 
to  the  words  “for  doing  nothing.”  This  is  generally  the  first 
objection.  If  a  man  is  to  be  paid  for  doing  nothing,  the  pay¬ 
ment  must  stop  whenever  he  begins  to  work !  Money  paid  for 
doing  nothing  is  blackmail.  The  Guaranteed  Employment 
Scheme  is  not  a  blackmailing  scheme.  According  to  the 
Scheme  nobody  would  be  paid  for  doing  nothing.  The  em- 
plovees  of  the  Guaranteed  Employment  Bureau  are  to  be 
paid  as  a  compensation  for  your  inability  to  employ  them, 
profitably  or  otherwise.  It  is  like  paying  the  wages  of  your 
standing  army  in  time  of  peace.  They  are  employed  for  the 
'nurnose  of  fiehting  and  paid  for  the  fighting  they  do  during 
a  war.  But  they  are  also  paid  year  after  year,  even  in  time  of 
peace,  merely  to  keep  themselves  in  readiness  for  fighting 
when  the  occasion  and  the  need  arrives.  Here  is  a  working 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED. 


61 


man  out  of  work  today;  he  was  wanted  yesterday  for  work, 
and  he  might  be  wanted  to-morrow,  but  he  is  not  wanted  to¬ 
day,  and  so  you  think  you  may  leave  him  to  starve  to  death  in 
the  meantime.  Is  this  not  an  extremely  short  sighted  policy? 
What  if  the  United  States  Government  followed  a  similar 
policy  and  disbanded  its  army  and  navy  during  periods  of 
peace  ?  The  men  who  are  out  of  work  to-day  have  to  be  main¬ 
tained  like*  your  army  and  navy  at  your  cost  to-day  in  view 
of  their  services  being  needed  by  you  in  future. 

65.  But  this  is  only  a  side  issue.  The  main  question 
refers  to  the  justice  of  the  scheme.  It  is  evident  that  the  word 
“just”  with  reference  to  the  objection  under  discussion  means 
“just”  according  to  the  abstract  universal,  moral  standard 
recognized  by  all  men  in  all  countries  at  all  times,  and  not 
according  to  some  particular  legal  conventional  standard, 
current  in  any  particular  country  at  any  particular  time.  Jacob 
buys  the  whole  birthright  from  his  starving  brother  for  a  dish 
of  soup.  The  transaction  is  generally  regarded  as  morally 
unjust,  though  it  was  and  still  is,  in  most  countries  legally 
just.  If  my  opponent  had  meant  that  my  Guaranteed  Em¬ 
ployment  scheme  is  unjust  in  the  sense  of  being  incompatible 
with  the  existing  laws  of  this  country,  I  would  not  care  to 
waste  words  in  refuting  it.  But  when  he  claims  that  the 
scheme  is  morally  unjust,  he  deserves  to  be  treated  with 
greater  respect,  and  for  this  reason  I  have  taken  up  this  ob¬ 
jection  before  all  others. 

66.  Now  suppose  I  were  to  show  you  that  you — I  mean 
society — have  done  something  to  put  some  men  out  of  work 
for  the  sake  of  some  benefit  which  society  has  obtained  there¬ 
by,  would  it  not  be  clear  justice  on  the  part  of  society  to  put 
them  to  employment  again?  Suppose  I  were  to  show  fur¬ 
ther  that  these  unemployed  persons  have  given,  and  are  still 
giving  you  the  employment  on  which  your  livelihood  and  your 
prosperity  depends,  would  it  not  be  the  height  of  injustice  and 
tyranny  to  deny  them  an  equivalent  of  what  you  have  re¬ 
ceived  from  them?  Take  for  instance,  the  patent  laws.  What 
is  a  patent?  It  is  a  reward  given  by  society  to  an  inventor. 
Everybody  knows  that  modern  unemployment  is  to  a  large 
extent  due  to  inventions.  In  uncivilized  countries  there  are 
no  inventions  or  labor  saving  devices  and  there  is  compara- 


62 


THE  UNEMPLOYMENT  PROBLEM. 


tively  no  unemployment.  Most  of  the  inventions  are  labor 
saving  devices,  and  must  necessarily  put  some  labor  out  of 
employment.  These  inventions  on  account  of  reduced  cost  of 
production  and  consequent  cheaper  prices,  induce  an  increased 
demand,  and  take  back  part  of  the  labor  to  meet  it;  but  the 
increase  of  work  in  this  way  cannot  keep  pace  with  the  ever 
increasing  power  of  invention  to  displace  labor,  and  in  the 
course  of  time  unemployment  of  a  part  of  the  population  be¬ 
comes  an  established  condition  of  society.  I  have  no  quarrel 
with  the  inventors.  Most  of  inventions  have  been  a  blessing 
to  society,  generally,  but  this  is  no  reason  for  ignoring  the 
harm  that  is  done  to  some  people  on  that  account.  On  the 
contrary,  in  proportion  to  the  great  benefits  of  the  invention 
to  society  in  general,  the  duty  to  compensate  the  few  victims 
of  invention  becomes  all  the  more  binding,  I  mean  morally 
binding. 

67.  But  the  claim  of  the  unemployed  is  even  stronger. 
The  patent  is  a  tax  on  society  for  the  purpose  of  rewarding 
the  inventor.  The  unemployed  are  required  to  bear  their  share 
of  the  tax.  They  are  called  upon  to  give  their  moral  and  legal 
support  to  reward  the  inventor,  and  to  pay  for  his  service 
which  has  thrown  them  out  of  employment,  and  yet  his  claim 
for  compensation  is  regarded  as  unjust.  I  have  no  grudge 
against  the  patent  law.  I  have  referred  to  it  merely  as  an 
illustration  of  how  the  laws  of  the  country  are  responsible  for 
unemployment  and  how  the  society  is,  on  that  account,  mor¬ 
ally  responsible  to  compensate  the  unemployed.  In  fact  the 
very  constitution  of  the  United  States  makes  for  unemploy¬ 
ment.  According  to  the  constitution  of  the  United  States 
it  is  not  allowable  for  the  government  to  levy  income  tax, 
except  with  certain  limitations.  An  income  tax  is  not  strictly 
unconstitutional  but  the  limitations  are  such  as  to  make  it 
practically  unconstitutional.  No  government  can  exist  with¬ 
out  some  kind  of  a  tax  and  a  man  can  pay  a  tax  only  out  of 
what  he  has  earned,  so  that  every  tax  is  in  one  sense  an  in¬ 
come  tax.  But  what  the  constitution  means  is  that  the  amount 
of  tax  shall  have  no  direct  reference  to  the  amount  of  income. 
What  then  is  the  basis  of  taxation?  A  man’s  income  is  divid¬ 
ed  into  two  parts,  one  part  is  laid  aside  as  saving  and  the  other 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED. 


63 


part  is  spent  for  something.  Most  of  the  taxes  in  this  coun- 
tiy  are  taxes  on  what  a  man  spends  for.  Every  dollar  spent  is 
spent  employing  others.  There  is  no  other  way  of  spending 
money.  Thus  we  arrive  at  the  conclusion  that  according  to 
the  constitution  of  the  United  States,  employment  is  taxed, 
and  that  most  of  the  tax  is  a  tax  on  employment.  The  people 
of  this  country  are  a  free  people  and  they  have  the  right  to 
adopt  what  constitution  they  choose,  but  if  they  choose  to 
tax  employment  of  productive  labor  as  if  it  were  something 
highly  undesirable,  they  ought  not  to  be  surprised  at  the  con¬ 
sequence  of  that  policy ;  they  might  as  well  tax  education, 
truthfulness  and  benevolence,  and  then  puzzle  themselves  out 
of  their  wits  to  discover  why  the  people  become  stupid,  dis¬ 
honest  and  avaricious.  The  constitution  is  responsible  for  un¬ 
employment  and  the  society  that  has  adopted  the  constitution 
and  stands  by  it  is  morally  bound  to  compensate  the  unem¬ 
ployed. 

68.  I  have  not  finished  with  this  argument,  Mr.  Wage- 
earner  ;  the  unemployment  problem  has  yet  a  stronger  hold 
on  you.  You  have  questioned  the  justice  of  making  you  pay 
a  part  of  your  hard-earned  income  for  the  benefit  of  the  un¬ 
employed.  Your  income!  How  did  you  earn  your  income? 
You  say  you  are  employed  by  a  railroad  company.  You  do 
work  on  the  road  and  get  your  wages.  Have  you  ever  tried  to 
figure  out  how  you  ever  yet  your  employment?  You  say  the 
railroad  company  is  your  employer  and  that  the  superintend¬ 
ent  of  your  department  employed  you.  You  are  wrong,  sir. 
The  railroad  company  is  only  a  sort  of  middleman  between 
you  and  your  employer,  your  real  employer  being  the  passeng¬ 
er  who  rides  inside  the  car.  He  is  your  employer  and  he  pays 
you  your  wages.  The  railroad  company  acting  like  an  employ¬ 
ment  bureau,  bring  the  employer  and  employe  together  and 
receive  by  way  of  profit  their  wages,  for  this  service  rend¬ 
ered  you  both.  No  single  passenger  can  be  said  to  be  your 
employer.  But  every  passenger  has  contributed  to  give  you 
your  present  employment.  You  too  in  turn  are  an  employer 
of  thousands  of  people  in  several  ways.  The  unemployed  even 
while  they  cannot  earn  have  yet  to  spend.  They  have  to  eat 
something,  drink  something,  wear  something,  and  live  some- 


64 


THE  UNEMPLOYMENT  PROBLEM. 

where.  They  pay  for  all  these  things  and  are  therefore  part 
employers  to  thousands  of  people.  You  Mr.  Wage-earner  as 
a  worker  on  the  railroad  have  received  a  part  of  your  employ¬ 
ment  from  the  unemployed.  For  many  of  the  things  he  uses 
are  carried  to  him  by  the  railroad  for  which  he  has  paid  the 
freight  and  out  of  this  you  have  received  your  wages.  Is  he 
not  entitled  to  his  share  of  employment  from  you,  when  you 
have  received  your  share  of  employment  from  him?  True, 
he  cannot  compel  you  to  -repay  the  debt,  but  that  is  a  defect 
of  the  law.  There  was  a  time  when  there  were  no  patent 
laws  and  genius  could  be  easily  robbed  of  its  due.  If  the  law 
does  not  compel  you  to  repay  the  employment  you  have  re¬ 
ceived  and  are  still  receiving  from  others,  the  law  must  be 
altered  and  made  to  conform  with  the  moral  standard  of  jus¬ 
tice.  On  you  Mr.  Wage-earner,  and  on  your  class,  therefore, 
rests  the  moral  responsibility  for  the  relief  of  the  unemployed. 
You  and  your  class  must  therefore  carry  the  whole  burden 
of  relieving  the  unemployed,  the  financial  burden  being  one 
of  the  burdens,  that  wage  earners  must  assume.  The  unem¬ 
ployed  have  the  best  possible  moral  claim  to  be  employed  by 
society  and  there  is  nothing  unjust  in  their  demands.  It  is 
your  refusal  to  employ  them  that  is  unjust. 

69.  And  you  are  being  rightly  served  for  your  injustice 
and  ingratitude.  What  you  call  the  modern  wage-slavery,  is 
only  a  result  of  th:s  grave  iniustice.  The  Socialists  attribute 
wage-slavery  to  the  greed  of  the  capitalist,  but  I  have  never 
been  able  to  follow  their  arguments  and  accept  their  conclu¬ 
sions.  On  the  contrarv,  the  greed  of  the  capitalist  is  as  far  as 
1  can  see  the  result  of  this  primary  injustice,  and  as  long  as 
the  injustice  lasts,  no  labor  laws  nor  anti-trust  laws  can  remedy 
the  evil.  On  the  contrary  the  moment  you  start  giving  em¬ 
ployment  to  those  who  need  it  and  who  are  morally  entitled 
to  it,  the  whole  of  the  capitalistic  edifice  will  begin  to  disin-  i 
tegrate  and  crumble  awav,  and  what  is  more  important,  the 
capitalist  will  no  longer  fight  for  saving  the  wreck.  For  be¬ 
fore  long  he  will  cease  to  possess — or  rather  cease  to  be 
possessed  by — the  motive  that  actuates  him  at  present,  and 
he  will  have  discovered  and  in  fact  realized  by  partial  ex¬ 
perience  that  his  best  interests  lie  in  permitting  the  industry 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED. 


65 


tc  pass  into  the  hands  of  2society.  There  will  be  no  need  for 
anti-trust  laws  and  labor  laws.  The  trust  will  have  ceased 
to  exist  for  want  of  motive,  and  the  condition  of  labor  will 
leave  no  occasion  for  enacting  any  labor  laws. 

70.  The  opponents  of  the  Guaranteed  Employment 
scheme  have  one  more  defense  along  the  same  line,  viz ;  that 
the  scheme  is  unjust.  Nobody  as  far  as  I  know  has  yet  raised 
the  objection  I  am  going  to  consider  next, — no  human  being 
could  have  the  coolness  to  say  it  openly,  whatever  one  may 
feel  whispering  on  the  wrong  side  of  his  heart.  But  it  is  a 
possible  objection,  one  which  his  Infernal  Majesty  is  sure  to 
urge  in  defense  of  his  workshop,  and  it  is  therefore  necessary 
for  me  to  act  as  a  Devil’s  advocate  in  order  to  offer  the  objec¬ 
tion  in  its  most  advantageous  and  apparently  unassailable 
form. 

71.  “No  person,”  says  the  Devil’s  advocate,  “is  compelled 
to  give  work  or  employment  to  another  person  if  he  does  not 
wish  to.”  The  acceptance  of  another  man’s  work  under  divi¬ 
sion  of  labor  is  always  by  the  giver’s  free  will,  never  by  com¬ 
pulsion.  No  man  is  compelled  to  ride  a  car  if  he  chooses 
to  walk.  Nobody  is  compelled  to  buy  a  piece  of  bread  and 
thereby  give  employment  to  the  farmer  and  baker,  if  he  chooses 
to  remain  hungry,  even  to  the  point  of  starving  himself  to 
death.  If  Miss  Mule  be  starving  it  mip-ht  be  an  act  of  kind¬ 
ness  to  employ  her,  but  kindness  is  no  duty;  she  has  no  claim 
to  be  employed  either  against  the  individual  or  against  the 
society  as  a  whole.  It  is  certainly  true  that  even  in  her  ex¬ 
treme  destitution  during  a  period  of  unemployment  she  became 
an  employer  and  has  given  some  employment  to  the  farmer, 

2.  “There  is  one  problem  above  all  others,  with  which  the  pro¬ 
letariat  regime  must  primarily  occupy  itself.  It  will  in  all  cases  be 

compelled  to  solve  the  question  of  the  relief  of  the  unemployed . 

An  actually  effective  maintenance  of  all  the  unemployed  must  com¬ 
pletely  alter  the  relative  -strength  of  the  proletariat  and  capitalist . 

once  things  have  gone  thus  far  the  employer  would  be  beaten  in  every 
conflict  (i.  e.  if  there  still  remains  a  conflict;  Analyticus)  with  his  em¬ 
ployees . once  the  capitalist  recognized,  however,  that  they  had 

the  right  only  to  bear  only  the  risk  and  burdens  of  capitalist  business, 
these  men  would  be  the  very  first  ones  to  renounce  further  extension 
of  capitalist  production  and  to  demand  that  their  undertakings  be  pur¬ 
chased  because  they  could  no  longer  carry  them  on  with  any  advant¬ 
age.^ Kautsky :  Social  Revolution,  page  113. 


THE  UNEMPLOYMENT  PROBLEM. 


66 

the  baker,  and  a  host  of  other  workers  in  several  trades,  but 
she  has  done  it  freely  and  of  her  own  accord,  for  the  gratifica¬ 
tion  of  her  own  desires  and  without  any  coercion.  She  may 
withhold  employment  if  she  likes  and  as  long  as  she  likes,  and 
we  will  not  compel  her  to  do  so  much  as  to  eat  one  morsel  of 
bread  to  save  her  life.  We  do  not  compel  her  to  employ  any¬ 
body  and  we  will  not  permit  others  to  compel  us  to  employ 
her. 

72.  I  hope  I  have  stated  my  adversary's  case  as  fairly, 
clearly,  and  completely  as  could  be  expected  from  the  Devil's 
advocate.  And  now  for  the  reply.  Mr.  Advocate,  you  do 
compel  Miss  Mule  to  be  an  employer  whether  she  wishes 
or  not.  I  do  not  use  the  word  compel  in  any  metaphorical 
sense ;  in  the  sense  in  which  women  and  children  are  com¬ 
pelled  to  work  in  factories  doing  heavy  work  for  long  hours  i 
cn  low  wages,  in  the  sense  in  which  the  strikers  are  often  com¬ 
pelled  to  return  to  the  mills,  if  the  mill  owners  do  not  climb 
down  or  are  rather  compelled  to  climb  down  in  the  meantime. 
For  compulsion  by  hunger  or  through  fear  of  unemployment  ! 
is  a  compulsion  of  different  type  and  I  know  you  will  argue  ; 
that  you  did  not  give  hunger  to  Miss  Mule,  or  create  in  her  , 
the  instinct  of  preferring  to  save  her  life  at  the  cost  of  her 
liberty,  or  her  savings,  or  may  be  her  honor  too.  Whoever  gave 
her  life,  or  instinct,  ought  to  have  made  adequate  provision 
for  her;  if  he  did  not  it  is  his  fault,  not  yours,  and  you  ought 
not  to  be  made  to  pay  for  it.  But  I  do  not  give  you  a  chance 
to  hide  behind  this  defense.  I  am  not  using  the  word  “com¬ 
pel"  in  any  metaphorical  sense ;  when  I  say  “compel"  I  mean 
“compel"  by  direct  legislative  and  executive  compulsion,  with 
the  force  of  the  who^  society  organized  for  that  compulsion,  ; 

73.  To  begin  with,  who  pays  your  police  and  your  mag¬ 
istrates,  your  mayors  and  your  governors,  your  president  and 
his  staff,  your  army  and  your  navy?  Every  man  and  woman 
in  the  United  States  pay  their  wages,  and  what  is  more  im-  1 
portant  for  our  present  argument,  is  compelled  to  pay.  Even 
poor  Miss  Mule  on  the  verge  of  starvation  has  to  pay  her  share  i 
of  the  wages  of  these  government  employees  before  she  can 
taste  one  mouthful  of  bread  or  teaspoonful  of  tea.  A  news¬ 
paper  reporter  gives  her  a  dime  to  buy  her  breakfast;  out  of 
this  she  is  compelled  to  give  half  a  dime  to  pay  the  w^ages  of 


LECTURE  ii— the  rights  of  the  UNEMPLOYED. 


67 


the  government  employees  before  she  is  allowed  to  buy  bread 
with  the  other  half  dime.  The  farmer  who  raised  the  wheat 
had  to  pay  the  land  revenue  tax.  The  miller  who  makes  the 
flour  had  to  pay  the  building  tax  and  machinery  tax.  The  rail¬ 
road  company,  the  baker,  the  store-keeper,  and  the  proprietor 
of  the  restaurant  had  all  to  pay  one  or  more  taxes.  All  these 
taxes  are  ultimately  included  in  the  price  of  the  bread.  No¬ 
body  can  buy  a  piece  of  bread  without  paying  his  share  of  the 
taxes  at  the  same  time.  Miss  Mule  is  “compelled”  to  pay  the 
wages  of  the  farmer,  baker,  and  the  railroad  company  only  in  a 
metaphorical  sense,  but  she  is  “compelled”  to  pay  her  share  of 
of  the  taxes  in  a  literal  sense.  She  is  compelled  to  be  an  em¬ 
ployer  of  the  whole  society  as  represented  by  the  government, 
and  to  pay  the  wages  of  the  government.  “But,”  you  might 
say,  “you  do  it  for  the  protection  of  life  and  property;  her 
life  and  property,  too,  along  with  that  of  all  others.”  Maybe 
you  do  it  with  the  best  possible  intentions  and  I  will  not  ques¬ 
tion  your  motives,  but  how  do  you  know  that  she  wants  it? 
It  might  be  wiser  at  times  for  a  man  to  ride  a  car,  rather  than 
to  walk  a  mile  or  two  through  snow  on  a  windy  day;  but 
would  you  allow  the  railway  company  to  compel  a  man  to 
ride  a  car  and  pay  his  fare,  or  rather  to  pay  his  fare  first  and 
then  to  let  them  ride  the  car  if  he  needs  and  cares  to  do  it.  Yet 
this  is  what  you  are  doing  to  Miss  Mule  today.  You  compel 
her  to  pay  for  protection  of  property  without  waiting  to  see 
if  she  has  any  property  to  protect,  or  if  she  thinks  it  worth  pro¬ 
tecting.  Apart  from  employment  she  is  compelled  to  give 
voluntarily  to  several  workmen  in  different  trades ;  you  com¬ 
pel  her  to  employ  the  civil  and  military  officers  and  to  pay 
the  wages.  But  when  she  complains  that  the  bargain  is  one¬ 
sided,  forced  and  unfair,  and  demands  employment  in  return 
for  what  you  have  taken  from  her  you  turn  round  and  say 
vou  never  compelled  anybody.  Mr.  Advocate,  are  you  sure 
that  vou  are  speaking  the  truth?  I  say  that  every  citizen  in 
the  United  States  is  compelled  to  pay  his  share  of  the  tax  ;  I 
say  that  this  money  raised  by  taxation  is  used  in  paying  the 
wages  of  the  government  which  represents  the  society  as  a 
whole;  I  say  that  every  individual  is  thus  compelled  to  be  an 
employer  of  society;  and  therefore  I  say  by  way  of  conclusion 
that  every  individual  has  a  moral  right  to  obtain  in  return, 


68 


THE  UNEMPLOYMENT  PROBLEM. 


employment  from  society  as  a  whole  or  from  its  representa¬ 
tive,  the  government.  I  challenge  you,  Mr.  Devil's  Advocate, 
to  contradict  me  on  one  of  these  points  if  you  can. 

74.  No  taxation  without  representation.  This  principle 
is  accepted  as  an  axiom  by  all  civilized  people — except  of 
course  where  a  civilized  race  has  the  ambition  to  hold  another 
uncivilized,  semi-civilized  or  decivilized  race  in  endless  ser¬ 
vitude.  Taxation  without  representation  is  slavery.  For  slav¬ 
ery  has  generally  been  defined  as  compulsion  to  give  a  part 
of  one's  work,  or  its  equivalent,  wdthout  the  giver's  consent, 
and  taxation  is  a  compulsion  to  give  the  equivalent  of  a  part 
of  one's  work.  Taxation  without  representation  is  a  taxation 
without  consent  and  is  therefore  a  form  of  slavery,  whatevei 
the  purpose  of  the  taxation  might  be.  In  a  society,  organized 
politically,  and  therefore  having  some  form  of  government, 
involuntary  unemployment,  or  even  the  prospect  of  such  un¬ 
employment,  constitutes  a  form  of  slavery,  for,  if  taxation 
without  representation  is  slavery,  so  is  taxation  without  guar¬ 
anteed  employment  and  for  similar  reasons ;  all  civilized  peo¬ 
ple  in  general  and  the  liberty  loving  citizens  of  the  republic 
of  the  United  States  ought  to  be  ashamed  of  its  existence ;  if 
they  are  not  it  is  not  my  fault;  I  have  done  all  I  could  to 
awaken  their  conscience. 

75.  But  taxation  is  not  the  only  method  of  compelling 
the  unemployed  to  be  employers  of  others.  The  standard  of 
civilization  which  we  pretend  to  adopt  and  compel  other  mem¬ 
bers  of  society  to  adopt  is  another  method  of  compelling  the 
unemployed  to  be  employers.  If  Miss  Mule  were  an  Abyssin¬ 
ian,  a  Zulu  or  Hotentot  woman  and  if  she  had  no  money  to 
spare,  she  might  have  preferred  to  go  about  without  clothes 
and  nobody  would  have  thought  of  preventing  her.  But  she] 
is  an  American  woman,  a  member  of  a  civilized  society  in  a 
civilized  country.  If  she  is  without  employment  and  has  to 
go  without  food  it  does  not  concern  us,  but  if  on  that  ac¬ 
count  she  tries  to  economize  what  little  savings  she  has  and 
goes  out  in  search  of  work  like  an  African  woman  without  any 
clothes  we  think  we  have  a  right,  as  a  civilized  society,  to  ar¬ 
rest  her  and  send  her  to  prison.  As  a  civilized  society  we 
have  the  right  to  compel  her  to  employ  the  cotton  and  wool 
merchant,  weaver,  and  clothier,  but  we  ignore  her  right  to  de- 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED. 


69 

mand  employment  from  society.  So  that  we  have  here  one¬ 
sided  rights  and  duties.  In  a  civil  society  the  right  as  well  as 
duties  must  be  mutual  and  well  balanced.  One-sided  rights  and 
duties  constitute  slavery.  In  an  African  savage  society  Miss 
Mule  could  have  no  rights  but  she  would  have  no  corres¬ 
ponding  duties  either,  and  she  would  have  been  enjoying  a 
state  of  savage  liberty.  But  here  in  civilized  New  York  she 
has  a  duty  toward  society  of  being  property  dressed,  but  she 
has  no  corresponding  rights  to  demand  the  means  of  obtaining 
the  dress.  She  has  duties  without  rights,  society  has  towards 
her  rights  without  duties.  In  other  words  she  is  a  slave,  and 
she  is  a  slave  because  we  insist  on  enforcing  a  certain  stand¬ 
ard  of  civilization.  Civilization  without  an  adequate  provi¬ 
sion  for  guaranteed  employment  is  slavery.  Mr.  Devil's  Ad¬ 
vocate,  I  challenge  you  once  more,  to  answer  this  charge  if  you 
can. 

76.  We  are  not  quite  through  with  this  argument  as  yet.  Let 
ns  give  the  opponent  every  possible  line  of  defense.  If  there  is 
anything  that  can  be  said  in  defense  of  the  wage-earner’s  right 
to  hold  fast  what  he  has,— anything  against  a  tax  for  the  re¬ 
lief  of  the  unemployed,  let  us  have  it.  He  shall  have  no  excuse. 
The  unemployed  as  consumers,  give  employment  to  the  work¬ 
ers,  and  are  therefore  entitled  to  receive  employment  in  re¬ 
turn;  that  was  our  argument.  "'But,”  asks  the  opponent,  “how 
does  he  give  the  employment?  Where  does  he  pay  the  wages 
from?  In  order  to  give  he  must  have  first  received ;  in  order  to 
spend  he  must  have  earned.  When  the  unemployed  worker 
buys  a  piece  of  bread,  and  pays  for  it,  he  does  not  create  a 
new  obligation.  He  only  returns  what  he  has  received.  With 
his  last  penny  he  squares  account.  Unless  he  gives  more  than 
he  has  received,  he  has  no  claim — nobody  owes  him  any¬ 
thing.  If  you  take  one  single  operation,  such  as  buying  a 
piece  of  bread  he  seems  to  give  employment  to  others,  but  if 
you  take  into  consideration  the  whole  life,  you  will  see  that 
he  does  nothing  of  the  kind ;  he  simply  returns  the  employ¬ 
ment  that  he  previously  received !  He  has  therefore  no  right  to 
demand  employment  from  others ;  nobody  owes  him  any  em¬ 
ployment.  If  they  employ  him  it  is  their  own  concern ;  there 
is  no  obligation. 

77.  There  is  no  doubt  that  the  argument  in  this  form 


70 


the;  unemployment  problem. 


has  considerable  force.  Whether  the  conclusion,  viz.,  that  the 
'‘unemployed  have  no  claim/'  be  valid  or  not,  the  general  prin¬ 
ciple  underlying  the  argument  is  certainly  valid.  We  cannot 
determine  a  person's  claims  or  liabilities  from  one  single 
transaction ;  we  must  add  together,  all  assets,  all  claims,  all 
liabilities,  and  strike  the  balance.  We  must  consider  all  the 
transactions  as  part  of  one  complete  transaction,  and  con-' 
sider  the  problem  as  a  whole.  This  is  what  is  known  as  a 
dialectic  method — the  method  that  in  Socialist  literature  made 
Hegel  famous.  This  method  consists  of  studying  a  process 
or  a  phenomenon  as  a  whole  instead  breaking  it  up  into  parts 
and  studying  each  part  separately  without  reference  to  other 
parts.  This  latter  method  of  studying  a  phenomenon  in  sep¬ 
arate,  and  isolated  parts,  without  their  relation  to  each  other 
or  to  the  whole,  is  called  the  ^metaphysical  method.  As  an 
illustration  of  this  method,  suppose  we  study  the  French 
Revolution  in  this  way ;  we  study  first  the  work  of  D’alembert, 
then  the  works  of  Voltaire  and  Rousseau.  Then  an  account 
of  the  “gabelle,”  then  the  fall  of  Bastille  and  so  on  until  we 
reach  Boneparteys  coronation.  We  should  then  have  gone 
through  the  whole  history  of  the  revolution,  and  yet  see  no* 
revolution  anywhere.  It  is  this  sort  of  study  of  isolated  facts 
which  prevents  the  economists  of  older  schools  seeing  the 
revolutionary  nature  of  capitalism.  It  is  the  same  mistake 
again  which  the  Socialists  are  making  in  their  turn  regarding 
the  nature  of  capitalism.  They  look  at  capitalism  as  an: 
isolated  phenomenon,  without  its  relation  to  all  other  phen¬ 
omena,  and  arrive  at  the  absurd  conclusion  that  it  has  "out¬ 
lived  its  historic  function V9  The  only  scientific  way  to  study 
a  phenomenon  is  to  study  it  as  a  whole.  This  does  not  mean 
that  we  should  not  analyse.  In  philosophy  as  in  science4 
analysis  is  the  only  practical  method  of  studying  complex' 
phenomena ;  the  dilectic  method  is  not  opposed  to  the  analyti¬ 
cal.  The  dialectic  method  requires  us  to  study  the  whole- 
phenomena,  either  as  a  whole,  if  we  can,  or  analysed  into  parts 
to  facilitate  study,  but  not  the  study  of  only  one  part,  to  the 

3.  The  term  “dilectic”  and  “metaphysical”  are  both  incorrect.  It 
is  unfortunate  that  they  have  gained  a  prominent  place  in  Socialist 
literature.  If  I  were  free  to  introduce  substitutes  I  should  use  the 
terms  “systemic”  and  “isolation”  methods  respectively. 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED, 


71 


entire  exclusion  of  other  parts.  In  the  analytical  method 
while  the  phenomenon  is  divided  into  parts,  for  convenience, 
no  part  is  regarded  as  isolated ;  each  part  is  always  maintained 
in  its  proper  relation  to  all  other  parts. 

78,  Let  us  now  follow  up  the  question  of  the  rights  of 
unemployed,  considering  the  phenomenon  as  a  whole.  Let  us 
consider  production  as  a  whole,  the  producers  as  a  whole, — of 
which  individual  workers  are  parts,  consumers  as  a  whole, — of 
which  the  individuals  are  parts.  The  rights  of  individuals 
arise  out  of  their  relation  to  society  as  a  whole  just  as  the 
'weight  of  anybody  is  the  aggregate  result  of  the  separate  grav¬ 
itational  forces  between  it  any  every  other  body.  Let  us  con¬ 
sider  ‘‘market”  as  a  whole — the  storehouse  of  the  produce 
of  human  labor  held  in  store  for  human  consumption.  Every 
individual  who  earns  a  dollar  throws  a  dollar's  worth  of  pro¬ 
duce,  or  service,  into  the  market.  No  matter  who' the  pro¬ 
ducer  is,  the  economic  law  is  always  the  same.  The  laborer 
tli rows  in  a  dollar’s  worth  of  ditch,  and  the  President  of  the 
United  States  throws  in  a  dollar’s  worth  of  statesmanship. 
The  policeman  throws  in  a  dollar’s  worth  of  public  protection, 
i.  e.,  protection  of  the  public  who  hire  him,  and  the  New  York 
gunman  throws  in  a  dollar’s  worth  of  private  protection  to  the 
individuals  who  hire  him.  The  minister  in  the  pulpit  throws 
ir  a  dollar’s  worth  of  blessings  of  the  world  above  for  those 
who  are  looking  for  it,  and  the  scarlet  woman  throws  in  dol¬ 
lar’s  worth  of  pleasure  of  the  world  below  for  those  who  prefer 
it.  The  teacher  throws  in  a  dollar’s  worth  of  intelligence. 
The  saloonkeeper  throws  in  a  dollar’s  worth  of  unintelligent 
recreation.  In  all  cases  they  receive  employment  from  the 
’“market”  and  wages  for  the  service  they  rendered  to  the  “mar¬ 
ket.”  Every  time  a  man  spends  a  dollar  he  throws  the  dollar 
back  into  the  market  and  receives  a  dollar’s  worth  of  service 
or  commodities.  He  employs  the  “market,”  the  employment 
being  distributed  among  the  individuals  who  constitute  the 
market. 

'79.  A  person  who  earns  a  dollar  and  spends  80c  receives 
a  dollar’s  worth  of  employment  and  returns  80c  worth  of  it. 
He  withholds  20c  worth  of  opportunity  to  work  and  earn 
wages.  In  other  words  he  is  a  robber  to  that  extent — I  mean 
a  robber  of  opportunity.  We  do  not  know  whom  he  robs — 


72 


THE:  UNEMPLOYMENT  PROBLEM, 


he  does  not  know  that  himself,  but  we  know  that 
he  robs  somebody.  It  is  like  a  man  who  throws  a 
bomb  in  a  crowd ;  he  does  not  know  whom  he  is 
going  to  strike;  he  may  now  know  it  even  after  he 
has  struck,  but  he  must  know  that  he  has  injured  some¬ 
body.  This  bomb  does  not  hurt  everybody,  it  hurts  a  few, 
the  majority  escape.  The  unemplyoment  created  by  one  man's 
savi  ng  hurts  only  a  few  who  remain  unemployed,  the  others 
escape ;  but  the  fear  of  being  struck  any  minute,  and  the  con¬ 
sequent  panic,  hurts  all  alike. 

80.  We  have  seen,  by  treating  the  economic  process  as 
a  whole,  that  the  man  who  saves  causes  unemployment  and 
robs  the  unemployed  of  opportunity  to  work  and  earn.  The 
unemployed  have  therefore  a  moral  right  to  compensation. 
This  answers  the  objection  but  it  will  probably  not  satisfy 
the  questioner;  he  will  be  silenced  but  not  convinced.  We 
have  evidently  overlooked  something.  What  is  it?  The  un¬ 
employed  person  in  buying  bread  spends  what  he  had  earned. 
That  wTas  the  starting  point  of  the  objection.  If  he  spends 
what  he  previously  earned  he  returns  the  opportunity  to  work 
that  he  got  from  the  “market”  in  the  first  place.  The  ac¬ 
counts  are  squared ;  there  is  no  robbery.  That  was  the  ob¬ 
jection  to  our  line  of  reasoning. 

81.  “The  person  spends  what  has  previously  earned ;”  is 
that  always  true?  We  know  it  is  not  true.  If  a  man  could 
live  only  on  his  earning,  he  would  be  starved  as  soon  as  his 
earnings  are  spent.  If  every  unemployed  died  so  fast  the 
fear  of  unemployment  would  be  so  great  that  society  could 
not  tolerate  it  for  one  month.  As  a  general  rule  the  unem¬ 
ployed  succeed  In  borrowing  from  friends  or  friendly  strangers. 
They  hope  to  pay  by  their  future  earnings,  by  opportunities 
which  they  expect  in  the  near  future ;  they  spend  the  borrowed 
money,  and  give  opportunity  to  work  to  others,  expecting  to* 
receive  equal  opportunity  for  themselves  in  return.  If  they 
do  not  receive  back  that  opportunity  they  are  robbed.  Those 
who  lend  the  money  are  also  robbed,  but  they  are  robbed  of 
money,  when  it  is  not  returned  ;  we  are  not  discussing  rob¬ 
bery  of  money ;  we  are  discussing  the  robbery  of  opportunity 
to  work,  so  we  will  leave  that  out  of  consideration.  The  un¬ 
employed  in  spending  money  give  employment  to  others  of 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED. 


73 


which  they  themselves  are  robbed,  by  those  who  ultimately 
receive  that  opportunity  and  do  not  return  it.  I  think  this  is 
clear  enough  to  convince  the  opponent. 

82.  The  Guaranteed  Employment  scheme  unjust!  On 
the  contrary  it  is  the  absence  of  guaranteed  employment  that 
is  unjust.  Every  civilized  society  is  pledged  to  give  employ¬ 
ment  to  every  individual  who  needs  it.  In  a  civilized  Society 
no  person  is  allowed  to  commit  suicide.  Various  reasons  are 
put  forward  in  support  of  this  law.  These  reasons  might  be 
good  or  they  might  not  be,  but  if  they  are  good  enough  to 
justify  our  interference  with  suicides,  they  are  equally  good 
as  pledges  for  guaranteed  employment. 

83.  First  among  these  for  example  is  the  argument  that 
this  country  is  a  Christian  country  and  its  laws  are  based  on 
the  teachings  of  Christ.  Suicide  is  an  unchristian  act  and  can¬ 
not  be  allowed  by  the  laws.  The  argument  is  of  very  doubtful 
validity  for  this  country  is  not  a  Christian  country  in  the  same 
sense  in  which  Spain  was  a  Christian  country  in  the  past  and 
Turkey  is  a  Mohammedan  country  to-day.  It  is  not  a  Christian 
country  even  in  the  sense  in  which  England  is  a  Christian, 
country  to-day.  Secondly,  prevention  of  suicide  by  compul- 
sary  legislation  has  as  little  to  do  with  the  teachings  of  Christ 
as  the  semi-idolatrous  celebrations  of  “Tabuts”  have  to  do 
with  the  teachings  of  Mohammed.  But  assuming  for  the  sake 
of  argument  the  validity  of  the  reasons  given  above,  assuming 
that  this  country  in  regarding  itself  a  Christian  country  is 
pledged  to  have  its  laws  in  conformity  with  the  teachings  of 
Christ,  it  follows  that  it  is  pledged  to  make  adequate  provision 
for  the  unemployed.  For  equal  in  importance  to  the  duty  of 
obeying  the  ten  commandments  is  the  duty  to  provide  for 
those  who  have  not.  It  is  the  most  imperative  of  all  Christian 
duties.  It  shows  itself  like  a  water-mark  through  every  paee 
of  the  Gospels.  It  is  the  very  essence  of  christianitv ;  outside 
that  there  is  no  Christianity  whatever.  The  Hon.  Mr.  Dives 
may  attend  the  church  every  Sunday  with  a  spotless  white 
collar  and  the  most  attractive  necktie,  he  may  eat  the  choicest 
turkey  on  Christmas  day.  But  he  is  no  Christian  as  long  as 
Lazarus  is  starving  outside  the  gate..  The  people  of  the 
United  States  may  repudiate  Christianity  if  they  do  not  care 
for  it,  but  they  cannot  claim  to  be  Christians  so  long  as  there 


74 


THE  UNEMPLOYMENT  PROBLEM. 


is  one  single  person  in  the  States,  in  want  of  food,  or  clothes, 
or  house.  “All  things  whatsoever  ye  would  that  men  should 
do  to  you,  do  ye  even  so  to  them.  For  this  is  the  law  and  the 
prophets/'  This  and  this  alone  is  Christianity.  Show  me  the 
man  willing  to  work,  able  to  work,  and  yet  who  does  not  wish 
other  men  should  give  him  an  opportunity  to  work  to  earn  an 
honest  living!  No  man  who  claims  to  be  Christian  can  be 
consistently  opposed  to  the  payment  of  a  tax,  that  will  give 
to  others  what  he  is  equally  anxious  to  receive  from  others. 
The  plea  of  Christianity  carries  with  it  a  pledge  for  a  system 
of  guaranteed  employment ;  the  two  things  are  inseparable. 
A  man  may  not  even  believe  in  the  existence  of  God  or  Jesus 
and  yet  be  a  Christian  in  the  true  sense  of  the  term,  at  least  so 
says  the  Bible.  But  no  opponent  of  the  guaranteed  employ¬ 
ment  bureau,  whose  opposition  is  based  on  a  pretext  of  its  not 
being  an  imperative  duty,  can  be  a  Christian.  I  call  upon  every 
preacher  and  interpreter  of  the  scriptures ;  priest,  parson  or 
rabbi,  to  support  me  if  I  am  right,  or  to  contradict  me  with 
chapter  and  verse  if  I  am  wrong.  I  maintain  that  a  nation, 
that  presumes  to  prevent  a  suicide  by  reason  of  its  professed 
Christianity,  is  thereby  pledged  to  provide  guaranteed  em¬ 
ployment,  and  I  want  to  be  contradicted  if  I  am  wrong. 

84.  Another  plea  for  prevention  of  suicide  is,  that  a  man 
has  no  right  to  destrov  his  own  life.  I  will  not  question  the 
truth  of  this  hypothesis.  I  have  only  to  ask  you  a  counter 
question.  Who  gave  you  the  right  to  interfere  with  me  if  I 
choose  to  hang  myself?  No  man  has  a  right  to  ride  a  car 
without  paving  the  fare,  but  if  a  man  rides  a  car  without  pay¬ 
ing,  and  if  the  railway  company  or  the  car  conductor  who  rep¬ 
resents  them  for  the  time,  does  not  choose  to  enforce  their 
rights  will  you  interfere  and  put  the  man  out?  No  man  in  this 
country  has  a  right  to  have  two  wives,  but  if  somebody  breaks 
the  law  and  the  government  of  this  country  for  some  good 
reasons  connive  at  the  act,  would  it  be  right  for  the  Mikado 
of  Japan  or  the  Sultan  of  Turkey  to  send  their  police  to  this 
country  to  arrest  the  man,  and  punish  him  for  bigamy?  I 
might  or  might  not  have  the  right  to  hang  myself,  but  I  want 
to  know  how  you  got  the  right  to  interfere.  If  I  try  to  murder 
another  man  and  you,  or  the  police  who  work  for  you,  try 
to  interfere;  T  can  understand  your  conduct.  You  argue 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED, 


75 


that  you  have  accepted  from  him  by  way  of  4 5tax  the  wages  for 
protecting  him  from  a  murderous  attack,  and  that  in  return 
for  these  wages  you  are  pledged  to  protect  him  and  to  pro¬ 
vide  in  anticipation  the  best  means  of  protecting  him.  You 
profess  to  be  the  keeper  of  his  life  and  you  claim  the  right 
to  interfere.  But  are  you  the  keeper  of  my  life  also?  If  not, 
why  do  you  interfere?  If  you  are,  you  are  pledged  to  make 
adequate  provision  for  the  safety  of  what  has  been  trusted  to 
your  keeping.  You  have  no  right  to  prevent  suicide  without 
a  provision  for  those  whom  you  compel  to  live.  In  compelling 
a  man  to  live  you  are  pledged  to  provide  a  guaranteed  employ¬ 
ment, 

85.  Compulsion  to  live  without  a  guaranteed  provision 
is  absurd.  Imagine  a  man  tossed  into  a  car  in  which  all  the 
seats  are  occupied  or  reserved.  Many  seats  are  apparently 
vacant  but  every  one  of  them  is  reserved.  There  is  no  place 
for  him.  He  asks  the  men  to  do  something  for  him  but  nobody 
can  do  anything.  The  man's  coming  there  was  a  mistake, 
but  none  of  the  passengers  had  brought  him  there,  it  is  not 
their  fault,  and  they  are  not  responsible  for  providing  him 
with  a  seat.  He  is  not  wanted  and  he  can't  get  a  seat  unless 
somebody  wants  him.  This  is  the  only  thing  they  have  to  say. 
One  of  the  passengers  seems  to  be  leader  and  spokesman, 
evidently  he  is  their  best  sample  of  clear  head  and  undefiled 
heart.  Our  seatless  passenger  turns  to  him  for  a  solution 
of  the  difficulty.  “I  am  willing,"  he  says,  “to  pay  for  my  seat 
but  there  is  none  available  and  you  know  that  I  cannot  re¬ 
main  like  this,  without  a  seat  very  long;  what  am  I  to  do?" 
5“God  knows,"  says  the  spokesman,  the  leader  of  the  passeng¬ 
ers  ;  “I  don't."  Seeing  that  there  is  no  further  hope  the  mart 
thinks  of  leaving  the  car  by  jumping  out  of  the  window,  for 
lie  discovers  that  he  cannot  retrace  his  steps  and  go  back  the 

4.  This  is  not  my  conception  of  tax;  at  this  stage  I  am  only  fol¬ 
lowing  the  popular  conception.  The  theory  and  principles  of  taxa¬ 
tion  as  I  understand  will  be  discussed  in  a  separate  lecture;  in  the 
meantime  I  am  content  to  follow  the  popular  conception  when  I  can, 
modifying  it  a  little  where  I  must. 

5.  In  a  meeting  in  the  Cooper  Union  ex-President  Taft,  then  a 
candidate  for  the  Presidency,  was  asked,  “What  a  man  was  to  do,  who 
being  out  of  work,  and  able  to  work,  could  find  no  work/'  “God 
knows,”  said  Mr.  Taft,  “I  don’t." 


f6 


THE  UNEMPLOYMENT  PROBLEM* 


Way  he  came  in.  “Gentlemen,”  he  says,  “I  am  sorry  for  having 
troubled  you,  but  I  did  not  come  here  of  my  own  account— in 
fact  I  have  no  idea  as  to  how  I  came  here  at  all.  It  was  some-  j 
body’s  mistake,  but  since  you  say  it  was  not  your  mistake,  I 
will  not  compel  you  to  give  me  a  seat,  and  now  by  your  leave 
I  will  6jump  out  of  the  window  and  leave  you  free  to  enjoy 
your  seats.”  “No!”  the  passengers  cry  aloud  with  one  voice, 
“we  will  not  let  you  go.”  “There  is  no  place  for  you  here,  so 
you  cannot  stay;  that  is  evident,  but  we  are  good  people  and 
we  will  not  let  you  go,  and  yet,  for  want  of  a  seat  it  seems 
that  you  will  have  to  go  after  all !”  This  is  what  we  are  doing 
to  our  unemployed  to-day.  We  will  not  let  them  stay — they 
are  not  wanted— and  we  will  not  let  them  go ;  we  are  too  good 
to  allow  it.  How  are  we  to  get  out  of  this  muddle?  “God 
knows,  I  don’t.” 

86.  In  fact  civilization  is  itself  a  pledge  for  guaranteed 
employment  Without  such  a  guarantee  there  can  be  no 
civilization,  just  as  without  a  guarantee  for  enforcement  of 
laws  there  can  be  no  government.  Civilization  is  the  forma¬ 
tion  of  a  civil  society,  that  is,  a  society  the  members  of 
which  are  possessors  of  civil  rights  and  are  under  obligation 

6.  The  following  extract  from  a  newspaper  is  a  sample  of  the 
hundred  that  challenge  the.  reader  ot  newspapers: 

JOB  GONE,  GIRL  LEAPS  TO  DEATH, 
jumps  From  Third  Story  of  Troy  Rooming  House  After  Standing 
Heedless  of  Cries  From  Street. 

‘‘Heedless  of  cries  from  street,  Helen  Leroux,  of  Fitch¬ 
burg,  Mass.,  about  seventeen  years  of  age,  leaped  from  the  third 
story  of  the  rooming  house  at  55  Fourth  Street,  Troy,  early  la>st  night 
and  is  in  Samaritan  hospital,  with  no  chance  of  recovery.  The  girl 
had  been  in  the  city  about  four  months  and  had  been  employed  by  the 
Watervliet  Chemical  Company,  Federal  Street  and  Bridge  Avenue. 
Monday  afternoon  she  was  taken  suddenly  ill  while  at  work  and  was 
sent  to  the  Samaritan  hospital  but  was  discharged  that  night.  It  was 
said  that  when  she  reported  for  work  yesterday  she  was  dismissed. 
She  then  went  to  her  room  and  remained  there  all  day.  A  little  after 
6:00  o’clock  last  night  pedestrians  in  Fourth  Street  saw  the  girl  climb 
out  upon  the  coping  on  the  third  floor  of  the  rooming  house  con¬ 
ducted  by  Mrs.  Katherine  Bowden.  She  stood  there  fully  three 
minutes,  not  heeding  the  cries  of  the  people  below  her.  A  man,  who 
lives  in  the  first  floor,  dashed  to  the  girl’s  room  and  was  reaching  out 
of  a  window  to  seize  her  when  she  jumped.  She  landed  head  first  on 
the  stone  flagging.  Her  skull  is  fractured  and  she  is  injured  internally. 


lecture:  ii— the  rights  of  the  UNEMPLOYED. 


77 


to  perform  civil  duties.  The  terms  civil  rights  and  civil  duties 
like  all  other  fundamental  conceptions  are  difficult  to  define, 
but  a  few  illustrations  might  serve  to  clarify  the  point  I  am 
endeavoring  to  make.  I  walk  along  the  street.  I  have  a 
right  there  and  nobody  has  a  right  to  prevent  it.  This  is  a 
civil  right ;  at  some  place  I  lose  my  way  and  I  want  to  ask 
somebody  to  show  me  the  way.  I  have  a  right  to  get  help 
from  society  and  the  society  through  the  agency  of  a  police¬ 
man  gives  me  the  needful  help.  I  receive  this  help,  not  as  a 
charity,  but  as  a  right.  Where  and  how  did  I  get  this  right? 
I  did  not  purchase  this  right  just  as  I  purchased  the  right  to 
occupy  my  bed  by  paying  for  it.  This  is  a  civil  right  which 
I  obtained  by  virtue  of  being  a  member  of  this  society.  The 
day  I  touched  the  American  soil  I  got  the  right  and  I  will  re¬ 
main  in  possession  of  the  right  as  long  as  I  stay  here.  It 
might  be  said  that  I  have  purchased  the  right  by  the  payment 
of  my  share  of  taxes,  but  that  would  be  wrong,  for  the  tax  is 
not  the  price  of  rights ;  and  the  exchange  of  the  tax  and  the 
rights  is  not  a  purchase.  Suppose  I  refuse  to  pay  the  tax;  I 
will  be  punished ;  there  is  not  the  least  doubt  about  it ;  but 
shall  I  lose  any  of  my  rights  as  a  citizen?  With  the  exception 
o^  such  rights  as  are  incompatible  with  the  punishment,  I  will 
lose  no  rights  whatever;  for  example  if  I  am  sent  to  jail  I  lose 
for  the  time  the  right  to  use  the  street  but  not  the  right  to  be 
protected  by  the  police  if  somebody  attacks  me.  If  a  tax  were 
the  price  of  my  rights,  and  I  refused  to  pay,  anybody  could 
murder  me  with  impunity.  But  even  a  murderer  who  is  to  be 
executed  to-morrow  cannot  be  murdered  with  impunity  to¬ 
day.  He  has  a  right  to  be  protected  and  so  has  the  man  who 
does  not  pay  his  tax. 

87.  But  the  fact  that  tax  is  not  the  price  of  civil  rights 
w  ill  be  clearer  by  another  argument.  Taxes  and  civil  rights 
bear  no  relation  of  quantity  like  a  commodity  and  its  price. 
Civil  rights  are  equal:  taxes  are  unequqal.  If  tax  were  a  price 
I  should  be  free  to  judge  for  myself  whether  the  rights  pur¬ 
chased  at  the  price  is  a  good  bargain  or  not.  I  have  no  such 
right  to  judge  for  myself.  I  cannot  refuse  to  to  pay  the  tax 
on  the  grounds  that  I  do  not  need  the  rights  or  that  they  are 
not  worth  the  price.  I  get  the  rights  whether  I  want  them 
or  not,,  and  I  have  to  pay  the  tax — wrongly  called  the  price — 


78 


THE  UNEMPLOYMENT  PROBLEM. 


whether  I  think  the  rights  as  worth  the  price  or  not.  The 
taxes  are  not  the  price  of  the  rights.  I  get  the  rights  because 
I  am  a  citizen ;  I  owe  a  duty  of  paying  my  taxes  because  I  am 
a  citizen ;  both  the  rights  and  the  duties  unconnected  with  one 
another  are  civil  rights  and  duties  respectively,  and  arise 
separately  out  of  my  being  a  citizen. 

88.  There  are  four  conceivable  ways  of  earning  wealth 
from  others.  First  by  begging.  This  method  is  too  well 
known  to  require  explanation.  Second  by  robbing — includ¬ 
ing  stealing,  swindling,  frauds,  blackmail,  etc.  This  method 
consists  of  taking  advantage  of  a  disability  of  other  men  who 
cannot  prevent  their  money  being  taken  away  from  them 
in  this  way.  (Of  these  methods,  blackmail  is  particularly 
important  for  the  purposes  of  our  theory.  In  theory,  the 
blackmailer  does  not  create  a  disability ;  he  only  keeps  on  the 
lookout  for  it  and  takes  advantage  of  the  chance  when  it 
comes,  without  direct  violation  of  the  law.)  Third,  by  process 
of  exchange  by  private  contract  including  wages.  This  is  the 
prevailing  way  of  earning  wealth.  It  is  the  legitimate,  and 
economically,  most  conducive  to  the  welfare  and  prosperity 
of  the  world.  And  fourth,  by  civil  right.  This  method  is  of 
theoretical  interest  only.  It  is  not  current  anywhere  except  in 
a  very  limited  scale,  such  as  the  old  age  pensions.  This  is 
the  method  recommended  by  Bellamy  in  his  “Equality.”  It  is 
the  method  advocated  by  some,  but  not  by  all  schools  of  So¬ 
cialism,  and  by  all  7anarchist-communists.  Of  these  four 
methods,  the  first  three  only  are  found  in  practice.  The  first 
two  are  regarded  as  objectionable  and  attempts  are  made  to 
stop  them  by  law.  It  is,  however,  nearly  impossible  to  prevent 
begging  and  blackmail.  The  first,  i.  e.,  begging,  is  not  diligent- 
1)  prosecuted  because  permitting  it  is  erring  on  the  side  of  vir¬ 
tue,  and  the  second  because  it  is  impossible  to  frame  a  law 
that  will  punish  blackmail  without  introducing  a  greater  evil 

7.  The  Anarchists  are  generally  divided  into  two  schools,  the 
Communinists  and  the  Individualists.  The  Individualists  stand  for 
the  individual's  right  to  the  full  produce  of  hi-s  labors.  The  ideal  of 
the  Anarchist  communist  is  practcally  the  same  as  scientific  Social¬ 
ism  except  that  they  repudiate  government  entirely,  whereas  the 
scientific  Socialist  recognizes  it  as  a  means  to  an  end,  until  its  func¬ 
tion  is  fullfilled,  after  which  he  thinks  it  will  naturally  cease  to  exist 


lecture  II— the  rights  of  the  UNEMPLOYED. 


79 


and  probably  without  indirectly  encouraging  it  more  than  it 
could  prevent  it.  The  third  method  is  unquestionably  the 
best  but  it  depends  upon  a  man  getting  employment,  and  we 
must  see  how  a  man  can  get  it. 

89.  There  are  similarly  four  conceivable  methods  of  get¬ 
ting  employment  from  others:  (1)  Begging,  (2)  robbing,  in¬ 
cluding  blackmail,  (3)  by  private  contract,  and  (4)  as  a  civil 
right.  Of  these  four,  employment  by  civil  right  is  practically 
unknown.  It  is  just  the  same  thing  as  my  “Guaranteed  Em¬ 
ployment. Employment  by  private  contract  has  a  suspicious 
resemblance  to  slavery  and  the  government  of  the  United 
States  is  supposed  to  take  a  every  possible  care  to  prevent  any 
such  contract  if  it  seems  to  be  in  the  nature  of  slavery.  Gen¬ 
erally  all  contracts  for  employment  are  one  sided,  for  the  em¬ 
ployee  has  nothing  to  offer  to  his  employer  in  exchange  for  the 
privilege  of  being  employed.  And  as  the  employer  is  under  no 
obligation  to  employ,  he  can  dictate  what  terms  he  chooses 
and  in  most  cases  the  employment  degenerates  into  slavery. 
In  the  absence  of  civil  right  and  right  by  private  contract,  there 
remain  but  two  other  possible  ways  of  obtaining  employment, 
viz.,  begging  and  blackmail,  and  these  are  mostly  in  use.  Both 
methods  are  lawful ;  the  laws  might  prevent  a  man  begging  for 
a  loaf  or  for  a  penny,  but  they  have  to  allow  begging  for  em¬ 
ployment.  Every  application  for  employment  begins  with, 
“I  beg  to  apply  for  .  .  .  .  ”  and  ends  with  “I  beg  to  be,  sir,  your 
most  obedient  servant.”  The  status  of  an  applicant  for  work 
is  the  status  of  a  beggar.  The  applicant  knows  it  and  is  pre¬ 
pared  for  the  sort  of  reception  he  often  meets.  The  employer 
knows  it,  though  in  some  cases  he  is  polite  enough  to  avoid 
appearances. 

90.  Employment  by  blackmail  is  at  present  the  most 
popular  method.  It  is  perfectly  lawful  ,  for  by  its  very  nature 
laws  are,  and  always  will  be  powerless  to  prevent  it.  A  com¬ 
petent  surgeon  needs  employment,  but  he  cannot  get  it  until 
somebody  has  broken  a  bone ;  a  lawyer  wants  employment 
but  he  cannot  get  it  unless  people  quarrel  with  one  another. 
The  builders  are  out  of  work,  they  beg  for  work  and  cannot 
get  it.  A  fire  destroys  a  whole  city  and  the  builders  have  now 
their  chance.  A  cabman  at  the  door  looks  at  me  with  greedy 
eyes  every  morning  for  me  to  employ  him,  but  he  does  not  get 


80 


THE  UNEMPLOYMENT  PROBLEM. 


work  from  me  unless  on  some  morning  I  have  overslept  and 
have  to  hurry  up  to  my  work,  or  unless  the  morning  is  frosty 
and  the  cold  unbearable.  A  girl  wants  work  as  a  house-maid 
but  cannot  get  it  until  some  house-wife  becomes  incapacitated 
and  is  unable  to  work  for  herself.  In  all  cases  men  have  to 
wait  for  somebody  to  get  in  trouble  and  then  take  advantage 
of  his  trouble  to  get  employment.  This  is  blackmail  in  every 
possible  sense  of  the  term. 

91.  To  sum  up:  The  individual  members  of  society  have 
to  depend  on  begging  or  blackmail  for  employment ;  it  cannot 
be  obtained  as  a  matter  of  right,  and  any  attempt  to  obtain  it 
by  private  contract  has  an  almost  unavoidable  tendency  to  de¬ 
generate  into  slavery.  Begging  for  employment  is  a  method 
always  open  to  all  but  it  is  the  least  successful  of  all  the 
methods  and  as  a  matter  of  fact  all  employment  reduces  itself 
to  blackmail, — either  the  employer  blackmailing  the  employee, 
or  the  employee  blackmailing  the  employer.  It  all  depend^ 
upon  which  of  the  two  parties  is  most  needy.  And  as  in  most 
cases  the  employee  is  the  more  need-pressed  of  the  two,  he  is 
the  victim,  and  the  whole  industrial  system  degenerates  into 
slavery.  And  now  to  return  to  the  point :  can  a  society  be 
regarded  as  civilized,  the  members  of  which  have  no  civil 
right  or  in  fact  any  right  to  obtain  something  that  that 
same  civilization  has  made  obligatory  to  all,  and  where  the 
members  are  compelled  in  the  absence  of  such  right,  to  beg 
oi  to  invent  and  carry  out  an  extensive  system  of  blackmail? 
In  a  civilized  society  every  member  has  as  much  moral  right 
to  receive  employment  when  he  needs  it,  as  he  has  to  receive 
protection  against  felons  when  he  needs  it,  and  this  right 
must  be  recognized.  The  laws  cannot,  and  need  not  try  to 
prevent  blackmail-employment,  as  it  would  be  beyond  their 
power  to  do  it,  but  they  ought  not  to  make  a  virtue  of  it  and 
compel  everybody  to  resort  to  that  method.  In  an  uncivilized 
society  giving  and  receiving  employment  is  of  no  conseciuence : 
men  can  employ  themselves  in  hunting  and  fishing;  if  they 
employ  one  another  it  is  a  matter  of  mutual  accommodation 
and  of  less  importance ;  anyway  it  is  not  obligatory.  In  a 
civilized  society,  giving  and  receiving  employment  is  of  prim¬ 
ary  importance,  the  rich  and  the  poor  alike  have  to  depend  for 
all  they  earn  on  their  being  employed.  We  are  civilized  in  so 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED, 


81 


far  as  to  allow  no  begging  or  robbing  for  money ;  we  are  civ¬ 
ilized  enough  to  compel  men  to  earn  money  rightfully  by 
working.  But  we  are  uncivilized  in  so  far,  that  we  make  no 
provision  for  supplying  the  needful  employment.  We  com¬ 
pel  men  to  be  employed  but  we  do  not  compel  ourselves  to 
employ  them.  We  compel  men  to  seek  employment  by  beg¬ 
ging,  blackmail,  or  voluntary  slavery,  and  for  this  great 
achievement  we  call  ourselves  civilized.  Civilization  implies 
a  civil  right  of  every  citizen  to  an  equqivalent  of  the  civil  duty 
imposed  on  him.  In  a  civilized  state  of  society,  giving  employ¬ 
ment  of  some  kind  to  others  is  a  civil  duty,  and  the  society 
must  respect  the  corresponding  right  by  having  an  adequate 
provision  for  guaranteed  employment..  A  refusal  to  recognize 
this  right  would  be  slavery.  • 

92.  The  duty  of  the  state  to  provide  employment  for 
the  unemployed  is  not  a  new  idea.  It  has  been  suggested  and 
discussed  by  several  schools  of  'reform ;  it  is  one  of  the  planks, 
though  not  an  important  one,  of  the  Socialist  platform;  but  it 
has  never  received  the  support  it  deserves  for  the  simple  rea¬ 
son  that  in  the  past  it  was  founded  on  consideration  of  senti¬ 
ment  instead  of  on  cool  and  impartial  logic.  People  have  al¬ 
ways  felt  that  there  was  something  wrong  somewhere  and  that 
the  people  through  the  government  ought  to  do  something  to 
put  it  right.  Having  first  arrived  at  the  conclusion;  the  need 
of  having  something  of  sufficient  shape  in  the  form  of  an 
argument  to  support  the  conclusion  made  itself  felt  at  an  early 
p>eriod.  The  -Tight  to  work”  was  derived  as  a  corollary  to 
the  “right  to  live.”  But  the  argument  could  not  create  convic¬ 
tion  as  it  is  weak  at  every  point.  The  right  to  live  is  a  purely 
negative  right :  it  means  that  no  person  ought  to  shorten 
another  man's  life.  It  does  not  create  an  obligation  to  pro¬ 
vide  with  means  of  preserving  life  for  another  man  if  he  needs 
them.  In  this  respect  it  resembles  all  other  negative  rights. 
I  have  a  right  to  walk  along  the  streets  and  nobody  has  a 
right  to  prevent  me.  But  if  I  cannot  walk  T  have  no  right  to 
demand  crutches  in  order  that  I  might  walk.  I  must  try  to 
find  crutches  for  myself  or  give  up  the  idea  of  walking  on  the 
streets.  The  right  to  live  belongs  to  the  same  class.  No 
person  has  the  right  to  push  me  from  the  Harvard  bridge  into 
th.e  Charles  River  below,  but  if  I  lose  my  balance  and  fall  into 


82 


THE  UNEMPLOYMENT  PROBLEM. 


the  river,  I  have  no  right  to  demand  the  services  of  a  swimmer 
to  jump  in  after  me  and  pull  me  out.  The  right  to  work  be¬ 
longs  to  the  same  class.  I  have  a  right  to  manufacture  cigars 
for  my  livelihood;  nobody  can  rightfully  prevent  it.  But  I 
have  no  right  to  compel  people  to  smoke  in  order  that  I  may 
get  work.  All  these  rights  are  negative  rights  and  Socialists 
using  one  of  them  to  do  the  work  of  a  positive  right  have 
spoiled  a  good  case  by  a  bad  argument.  The  mass  of  people 
tc  whom  the  appeal  was  made  could  instinctively  feel  the 
workmen's  right  to  get  work.  But  in  absence  of  strong  argu¬ 
ments  capable  of  bearing  the  conclusion  they  came  to  regard 
these  claims  as  appeals  to  charity.  And  the  duty  of  the  state 
to  provide  for  the  unemployed  as  a  matter  of  charity  alone, — 
a  good  thing  to  be  done,  if  it  can  be  done.  But  there  seems 
to  be  no  possibility  of  the  state  being  able  to  do  it  without  a 
great  expenditure  and  there  the  question  generally  ends. 

93.  And  the  people  are  right ;  if  the  right  to  work  has  no 
stronger  foundation  than  the  right  to  live,  or  than  the  right 
of  a  cripple  to  the  use  of  crutches,  the  government  is  under  no 
obligation  to  provide  work.  Every  man  or  woman  has  a 
right  to  marry,  but  it  does  not  follow  that  the  government 
should  procure  husbands  and  wives  if  the  parties  cannot  find 
partners  to  marry  them.  The  people  of  this  country  are  not 
close  fisted  misers.  They  have  a  sense  of  duty  and  a  zeal 
in  the  performance  of  it.  They  have  spent  millions  for  war, 
th&n  escape  by  paying  one  cent  for  tribute.  When  the  peo¬ 
ple  are  awakened  to  their  duty  they  do  it.  From  the  nameless 
widow  who  drops  her  cent  in  the  Salvation  Army  charity  box 
to  the  nameless  millionaire  who  drops  two  and  a  half  million 
dollars  in  the  Technology  charity  box  there  is  a  strong  sense 
of  duty  that  never  been  rivalled  in  the  history  of  the  European 
races.  All  that  is  necessary  is  to  show  to  the  American  citi¬ 
zen  that  he  owes  to  the  unemployed  the  duty  of  providing  a 
guaranteed  employment,  to  emancipate  the  slave  citizen  from 
the  bonds  of  unemployment,  and  there  is  no  doubt  that  he  will 
do  the  duty  at  any  cost,  even  at  the  cost  of  a  second  civil  war, 
if  the  sacrifice  is  required  of  him  once  more.  I  have  done 
my  duty  in  thi's  respect ;  I  have  shown  that  the  right  to  work  is 
unlike  the  negative  right  to  use  crutches ;  it  is  a  positive  right 
like  the  workmen's  right  to  his  wages,  like  the  creditor’s  -righ 


LECTURE  II— THE  RIGHTS  OF  THE  UNEMPLOYED. 


83 


to  the  repayment  of  debt,  like  the  grocer’s  right  to  the  price  of 
the  goods  supplied;  like  a  man’s  right  to  get  police  protection 
in  the  street,  and  judicial  protection  in  the  courts.  I  have  pre¬ 
sented  the  bill  on  behalf  of  the  unemployed  and  I  am  sure  the 
American  citizen  will  not  dishonor  it.  The  unemployed  ask 
for  no  charity ;  they  ask  for  what  is  their  due.  They  have  given 
you  employment  and  they  only  ask  back  what  you  have  taken 
from  them,  and  nothing  more.  One  word  more  before  I 
conclude.  I  present  this  bill  not  to  the  idle  rich  who  has  done 
nothing  to  earn  his  wealth ;  who  received  it  from  his  father 
and  whose  only  achievement  now  is  to  waste  it  away  in  dis¬ 
sipation  ;  nor  to  the  stock-exchange,  gambler  or  swindler,  nor 
t o  the  child  of  fortune  who  awoke  one  morning  with  dollars 
raining  through  his  roof.  This  bill  is  presented  to  the  honest 
wage-earner  who  has  received  employment  from  others  in 
some  form  and  who  must  therefore  pay  back  the  debt.  The 
rich  always  claim — and  often  rightly — that  they  too  are  wage- 
earners  and  that  their  large  incomes  are  only  their  wages 
of  ability ;  of  comparatively  greater  services  they  do  in  the 
work  of  initiative  ability,  supervision,  and  control.  If  they 
th:nk  so  thev  may  stand  along  with  the  wage-earner  and  pay 
their  share  of  the  bill ;  but  any  rich  man  who  claims  to  be  an 
idle  rich,  who  has  done  no  service  for  society,  and  has  there¬ 
fore  received  no  employment  is  under  no  obligation  to  pay ! 
Let  the  rich  choose  for  himself  whether  he  prefers  to  be  ranked 
a  drone  and  8escape  payment,  or  to  be  ranked  with  the  honest 
toilers — brain  and  muscle  workers — and  pay  his  share  of  the 
tax  for  employing  the  unemployed.  We  of  the  great  army  of 
toilers  have  nothing  to  lose. 

94.  Incidentally  I  may  take  up  at  this  point  the  ques¬ 
tion,  why  I  have  exempted  the  capitalist  from  taxation  for 

8.  This  might  appear  to  contradict  the  provisions  of  paragraph 
59  If  any  capitalist  stood  up  to  claim  exemption  on  the  -strength  of 
the  argument,  presented  above,  the  tentative  programme  will  have  to 
be  revised  in  response  to  their  logical  claim.  But  I  have  a  moral  cer¬ 
tainty,  that  no  capitalist  will  claim  exemption  on  the  ground  that  his 
income  i*s  unearned  and  represents  no  service.  Not  only  would  he 
refuse  to  make  such  a  claim,  but  on  the  contrary  he  would  strongly 
resent  any  such  imputation,  though  in  some  cases  at  least  such  imputa¬ 
tion  is  no  doubt  very  richly  deserved 


84: 


THE  UNEMPLOYMENT  PROBLEM.' 


the  purpose  of  relieving  the  unemployed.  A  complete  dis¬ 
cussion  of  this  question  would  be  out  of  order  at  this  stage,  for 
we  are  discussing  just  now  the  rights  of  the  unemployed  only. 
In  the  first  place,  I  do  not  propose  to  exempt  the  whole  of  the 
capitalistic  profit  from  taxation,  but  only  the  reinvested 
profit.  Reinvesting  profit  is  by  itself  a  process  of  relieving 
the  unemployed,  consequently  in  the  act  of  reinvesting,  the 
capitalist  has  fulfilled  his  obligation,  to  the  unemployed,  at 
least  to  the  extent  of  the  reinvested  earnings.  As  to  the  other 
part,  the  part  used  in  saving  or  spent  in  a  haphazard  way  ac¬ 
cording  to  his  own  needs,  convenience  or  fancy,  his  responsi¬ 
bility  is  equal  to  that  of  any  other  employed  worker,  and  that 
part  is  therefore  not  exempt.  In  other  words,  I  consider  the 
capitalist  to  be  a  capitalist,  only  to  the  extent  of  his  rein¬ 
vested  capital.  As  to  what  he  saves  in  cash  or  spends  for  his 
consumption  his  moral  obligation  is  on  a  level  wdth  that  of  an 
employed  worker,  rendering  service  and  earning  his  wages 
in  the  form  of  profits  in  return  for  that  service.  To  the  extent 
of  his  uninvested  earnings,  he  is  a  worker  like  any  other  work¬ 
er,  and  is  therefore  responsible  for  unemployment.  In  his 
capacity  as  a  worker,  he  must  share  the  burden  of  tax  for  the 
relief  of  the  unemployed. 

95.  To  conclude.  The  unemployment  of  the  unem¬ 
ployed  is  the  sin  of  employed  wage  earner.  He  is  a  robber  for 
he  has  received  employment  without  giving  equivalent  re¬ 
turn.  The  only  way  to  atone  for  the  sin  is  by  giving  employ¬ 
ment  to  the  unemployed.  The  Guaranteed  Employment 
scheme  is  not  unjust.  On  the  contrary  it  is  the  most  just  of 
claims,  that  any  social  reformer  has  ever  made  on  behalf  of 
the  oppressed.  Society  has  received  and  is  receiving  employ¬ 
ment  from  the  unemplgyed,  both  jointly  and  severally,  with 
compulsion  and  without,  and  ought  to  give  adequate  return  for 
what  they  received.  Society,  by  adopting  certain  principles 
as  the  basis  of  their  constitution  and  by  accepting  other  prin¬ 
ciples  as  the  foundation  of  social  integrity,  has  created  unem¬ 
ployment  and  must  therefore  compensate  the  victims  of  their 
policy.  Society  in  adopting  certain  standards  of  civilization 
has  given  an  implied  pledge  for  guaranteed  employment  and 
society  must  either  stand  by  the  pledge  or  abandon  civiliza¬ 
tion.  A  refusal  to  give  guaranteed  employment  would  be  a 


vECTURE  II— THE  RIGHTS  OP  THE  UNEMPLOYED. 


85 


lisgraceful  breach  of  pledge.  A  provision  for  guaranteed 
employment  is  an  urgent  duty  and  an’ inviolable  obligation  of 
ivery  civilized  society,  and  therefore  of  the  state  or  govern- 
nent  which  represents  the  society,  and  has  for  the  time  under- 
;aken  the  task  of  enforcing  the  rights  and  discharging  the 
luties  of  society.  Unemployment  is  a  leprosy-spot  on  civiliza- 
;ion  and  it  is  the  result  of  the  great  sin  of  the  wage-earner. 
To  cleanse  society  of  this  dire  disease  is  the  first  duty  and  the 
nost  sacred  duty  of  the  state  and  must  be  done  at  any  cosj). 

UNEMPLOYMENT  MUST  BE  DESTROYED. 


f 


' 


Wage  Slavery:  Cause  and  Cure 

LECTURE  III. 

1.  “Give  and  it  shall  be  given  unto  you;  good  measure  pressed 
down,  and  shaken  together  and  running  over,  shall  men  give  into' 
your  bosom.  For  with  the  same  measure  that  ye  meet  withal,  it  shall 
be  measured  to  you  again.” — Luke:  VI-38. 

2.  “Be  not  deceived:  God  is  not  mocked:  for  whatsoever  a  man.' 
soweth,  that  shall  he  also  reap.”- — Epistle  to  Galatians:  VI-7. 

96.  The  next  Objection  against  the  Guaranteed  Employ¬ 
ment  scheme  is,  that  it  is  impractical.  It  is  an  important  ob¬ 
jection,  for  if  the  scheme  is  impossible,  no  amount  of  argument: 
in  support  of  its  moral  claims,  can  make  it  possible.  An  im¬ 
possible  duty  is  no  duty,  says  the  Sankhya  philosophy.  As  the 
workers  are  under  no  obligation  to  perform  miracles,  they  can¬ 
not  be  persuaded  to  adopt  an  impossible  scheme  of  reform. 
We  must  therefore  try  to  see  if  the  scheme  is  really  imprac¬ 
tical,  and  if  so  to  what  extent  it  is  impractical.  The  foremost! 
of  all  objections  under  this  head  is,  that  there  is  not  work, 
enough  for  all.  This  objection  is  presented  in  several  forms j 
and  the  reply,  though  it  is  the  same  reply  in  all  cases,  has  also 
to  be  presented  in  several  forms  so  as  to  suit  the  objections  or 
rather  the  several  forms  of  the  objection. 

97.  What  work  are  you  going  to  give  the  employees  em¬ 
ployed  under  the  guaranteed  employment  scheme?  The  army 

1.  For  the  sake  of  convenience  I  have  used  the  word  wage-slav¬ 
ery  thus  far  in  the  popular  sense.  In  the  next  lecture  I  will  explain 
my  own  views  on  this  point. 

2.  In  this  lecture  I  will  limit  myself  to  such  practical  objections 
as  concerns  the  wage  worker  directly.  Other  practical  objections  will 
be  considered  later.  The  subject  will  be  discussed  from  what  i-s 
known  in  labor  literature  as  the  “prolatariat”  point  of  view.  This  must 
necessarily  involve  some  contradictions,  for  I  could  not  pledge  myself 
to  maintain  consistently  a  position  which  I  accept  provisionally  for 
a  limited  use.  For  example,  throughout  this  lecture  I  have  proceeded 
on  the  assumption  that  every  worker,  including  the  wage  worker,  is 
entitled  to  the  full  produce  of  his  labor,  and  that  the  condition  of  the 
wage-worker  is  one  of  slavery,  though  I  do  not  hold  either  of  these 
views.  The  incorrectness  of  both  these  views  will  be  demonstrated  in’ 
the  next  lecture.  (See  Lecture  IV,  Capitalism:  The  Wage  System.) 


LECTURE  III— WAGE  SLAVERY:  CAUSE  AND  CURE. 


8: 


and  navy  are  fully  manned ;  the  government  has  all  the 
police  they  want,  the  postal  department  is  full;  there  is  no 
more  work  to  absorb  more  men  in  any  department.  Where  can 
the  government  use  them?  I  cannot  answer  that  question  at 
this  stage,  and  I  don't  think  I  am  bound  to  answer  it  even  if  I 
could.  If  there  had  been  sufficient  work  for  all,  the  existing 
non-guaranteed  bureaus  would  have  been  amply  sufficient  for 
the  needs  of  the  society.  There  would  have  been  no  unem¬ 
ployment  problem  and  no  need  of  a  scheme.  But  we  know 
that  for  some  reason  under  the  present  system  of  work-dis¬ 
tribution  there  is  not  work  enough  for  all  the  unemployed ; 
that  something  has  to  be  done  to  meet  the  situation.  Some 
men  are  compelled  to  remain  without  work.  These  men, 
willing  to  work  and  unable  to  get  it,  are  a  dangerous  element 
in  every  way.  Some  of  them  will  degenerate  into  habitual 
and  professional  loafers,  others  more  dangerous  will  be  crim- 
inals-violators  of  law,  but  some  and  probably  a  very  large  sec¬ 
tion  of  them,  who  are  by  far  the  most  dangerous,  will  be  law- 
evaders,  human  sharks  of  all  kinds,  criminals  and  yet  not  crim¬ 
inals  technically  in  the  eyes  of  law,  inventors  of  all  kinds  of 
fakes  and  swindles.  In  every  case  somebody  has  to  bear,  will¬ 
ingly  or  unwillingly,  consciously  or  unconsciously,  the  burden 
of  supporting  them. 

98.  The  question  for  us  today  is,  whether  the  burden 
of  the  unemployed  should  be  borne  by  the  individuals  on  whom 
chance  may  throw  the  burden,  or  whether  the  whole  society 
ought  to  be  made  to  share  it.  I  believe  that  if  somebody  has 
to  bear  the  burden  at  all,  it  would  be  best  for  the  individual 
as  well  as  for  the  society  that  all  should  bear  it  alike.  I  do 
not  refer  here  to  the  moral  obligation  of  the  society  to  share 
the  burden  as  I  have  fully  discussed  that  part  of  the  question 
already,  I  am  now  dealing  with  the  subject  from  a  strict 
utilitarian  point  of  view.  Even  after  leaving  aside  every  con¬ 
sideration  of  duty,  and  weighing  the  profits  and  looses  of  this 
policy,  it  is  easy  to  see  that  in  the  long  run  it  would  be  profit¬ 
able  to  have  the  burden  shared  by  all.  If  Japan  invaded  this 
country,  the  west  coast  would  have  to  bear  the  brunt  of  the 
fight,  but  when  the  bill  comes  round  the  whole  nation  has  to 
pay,  not  only  the  men  of  Los  Angeles,  San  Francisco,  and 
Seattle.  Apart  from  consideration  of  justice,  prudence  would 


88 


THE  UNEMPLOYMENT  PROBLEM, 


dictate  the  same  policy.  If  the  west  coast  alone  had  to  bear 
the  whole  cost,  what  guarantee  is  there  that  the  west  coast 
would  not  raise  the  white  flag  as  soon  as  the  first  Japanese 
dreadnaught  comes  in  view  ?  I  do  not  doubt  the  courage  or  the 
patriotism  of  the  Western  people,  but  when  we  are  discuss¬ 
ing  a  question  on  strict  profit  and  loss  basis,  we  have  no  right 
to  assume  that  the  western  people  might  not  take  a  similar' 
view.  As  a  matter  of  policy  alone  apart  from  all  other  con-  ] 
siderations  it  is  highly  desirable  that  the  burden  of  the  un- 
employed  should  be  borne  alike  bv  all. 

99.  Nor  is  it  possible  to  shirk  this  duty  effectively  for  a.  | 
long  time.  You  may  not  pay  your  share  today,  but  tomorrow 
or  the  day  after  you  will  have  to  pay  when  the  bill  comes  j 
round.  In  fact  you  are  paying  it  right  now.  A  skillful  swind¬ 
ler  goes  to  the  stores  and  robs  them  of  a  hundred  dollars.  • 
You  think  the  store  proprietor  has  borne  the  burden ;  it  is  his  ! 
loss  and  you  think  it  does  not  concern  you.  But  it  does  con-  i 
cern  you  for  you  have  to  pay  the  compensation  some  days 
later;  in  fact  you  begin  to  pay  it  even  before  the  stores  are- 
robbed.  Among  the  several  items  that  go  to  make  the  cost 
of  any  thing  you  purchase,  is  the  risk  of  the  trade.  Every 
trader  knows  that  there  are  always  various  risks  in  trade,  in 
spite  of  all  possible  care  some  of  these  will  visit  him.  He 
therefore  adjusts  his  prices  so  as  to  cover  these  risks.  If  na 
risks  come  round,  he  gets  so  much  more  profit.  If  he  loses 
more  than  what  he  had  looked  for,  he  is  a  loser.  One  trader 
may  lose  more  heavily  then  another  but  on  an  average  the 
extra  cost  to  cover  the  risk  is  always  greater  than  the  actual 
losses,  and  therefore  society  not  only  pays  the  swindler's  bill, 
but  something  more  because  they  pay  it  through  a  middle 
man.  So  that,  if  you  have  to  pay  for  the  unemployed  at  all 

it  is  best  for  you  and  the  whole  society  to  do  it  in  a  methodi-  - 
cal  and  business-like  way.  They  will  have  to  pay  less, — in 
the  long  run  much  less — than  they  pay  now.  They  will  also 
have  a  greater  control  and  a  more  direct  interest  in  exercising' 
that  control. 

100.  The  question  “What  work,  etc.,  does  not  concern 
me.  It  is  you  who  have  to  answer  it.  It  is  you  who  have  to 
bear  the  burden,  either  directly  if  you  adopt  this  scheme,  or 
indirectly  if  you  allow  things  to  go  on  as  heretofore.  It  is 


LECTURE  III— WAGE  SLAVERY :  CAUSE  AND  CURE* 


89 


therefore  your  duty  to  find  out  means  to  make  your  burden 
lighter.  In  my  capacity  as  a  member  of  society,  bearing  my 
share  of  burden  with  you,  I  will  also  take  my  share  of  the  duty 
of  suggesting  a  profitable  work,  but  in  my  present  capacity 
as  propounder  of  the  guaranteed  employment  scheme,  I 
•ignore  all  responsibility  of  suggesting  the  work.  My  duty  at 
this  stage  is  to  show  that  the  burden  of  keeping  up  the  guar¬ 
anteed  employment  bureau  is  light  and  easily  bearable,  ever! 
without  any  work,  that  is,  even  if  you  have  to  pay  the  wages 
at  a  dead  loss,  and  will  be  still  lighter  when  a  part  of  the  force 
employed  is  provided  with  useful  work.  The  number  of  un¬ 
employed  in  the  United  States  is  estimated  as  being  two  mil¬ 
lions,  so  that  a  tax  of  five  cents  to  the  dollar  will  cover  the 
cost  of  keeping  them  and  their  families  even  without  any  work. 
This  of  course  is  a  very  exaggerated  estimate.  Five  cents  to 
the  dollar  gives  the  unemployed  higher  wages  than  what  many 
of  the  wage  earners  receive  at  present.  Secondly,  under  good 
management  the  government  might  be  able  to  find  work  for  at 
least  half  the  force,  thereby  earning  a  part  of  the  cost.  The 
actual  tax,  society  will  have  to  pay  under  working  condi¬ 
tions,  will  probably  not  exceed  two  cents  to  the  dollar. 

101.  But  even  thus  the  comparison  is  not  quite  fair.  The 
unemployed  is  a  burden  on  society  today.  He  begs,  he  steals, 
he  becomes  a  faker,  a  shark,  a  sycophant,  anything  he  can 
obtain  a  living  by,  and  society  has  to  bear  the  burden.  I  only 
ask  society  to  do  the  same  thing  methodically,  in  a  business¬ 
like  way,  by  the  whole  society  on  an  organized  plan,  instead 
ot  by  some  persons  who  chance  to  be  compelled  reluctantly 
to  bear  the  whole  load.  But  apart  from  the  cost  of  living  the 
unemployed  costs  the  wage  earner  far  more  in  an  indirect  way 
than  it  would  to  keep  him  on  a  pension.  Among  the  unem¬ 
ployed  there  are  always  some  men,  if  not  all  in  fact  the  major¬ 
ity  of  them,  who  are  willing  to  work,  anxious  to  get  work  at 
any  cost,  and  unable  to  get  a  chance  in  any  other  way,  they 
offer  to  sell  their  labor  for  any  price,  however  low,  and  on  any 
terms,  however  degrading.  They  escape  being  loafers  by 
choosing  to  be  slaves  instead,  and  being  voluntary  slaves,  no 
anti-slavery  law,  however  stringent,  can  save  them  from  the 
self-inflicted  slavery.  In  fact  their  status  as  wage  slaves  is  in¬ 
comparably  better  than  being  unemployed.  But  in  enslav- 


90 


THE  UNEMPLOYMENT  PROBLEM, 


i tig  themselves  they  bring  the  whole  of  the  wage  earner  class, 
to  the  condition  of  slaves.  This  is  the  price  you  have  to  pay, 
Mr.  Wage  Earner,  for  enjoying  the  privilege  of  letting  the  un¬ 
employed  take  care  of  themselves.  Can  you  afford  to  pay 
this  price  any  longer? 

102.  No  wage  earner  can  expect  to  get  the  Tull  value  of 
his  labor  so  long  as  another  willing  worker  is  greedily  waiting 
and  watching  for  an  opportunity  to  displace  him  on  half-wage. 
\ou  enact  your  labor  laws  and  after  waiting  for  a  time  you 
are  surprised  to  see  each  one  of  them  a  dead  letter,  and  that 
the  condition  of  labor  is  just  what  it  was  or  if  anything  a  little 
Worse  than  before.  What  else  should  you  expect?  The  op¬ 
pressed  wage  earner  in  whose  interest  the  laws  are  supposed 
to  have  been  made,  seems  to  have  every  possible  motive  to 
defeat  the  laws  and  to  help  his  oppressor.  Why  does  he  be¬ 
have  like  this?  Why  does  he  voluntarily  throw  away  the  help 
offered  him  by  law?  Simply  because  the  laws  cannot  help 
him.  They  cannot  give  him  an  employment  when  he  has  not, 
or  help  him  to 3  4keep  it  when  he  has.  The  employer  has  ab¬ 
solute  power  over  the  wage  earner  in  this  respect,  and  having 
power  in  this  respect  he  has  oractically  an  unlimited  power  in 
every  other  respect.  The  laws  may  ignore  the  power  but  they  • 
cannot  deny  it.  In  this  way  a  few  men  out  of  work  can  reduce 
and  do  reduce  the  whole  working  community  to  a  condition  of 
absolute  slavery,  and  no  law  can  prevent  it. 

103.  Now,  American  wage  earner,  I  appeal  to  your  com¬ 
mon  sense.  Is  it  so  very  hard  for  you  to  pay  two  or  perhaps 
five  cents  out  of  every  dollar  to  place  your  worst  enemy  out  of 

3.  See  paragraph  96,  foot  note  2.  For  complete  discussion  of  the  ! 
doctrine  of  “full  value/’  see  Lecture  IV. 

4.  The  following  extract  from  “Boston  American”  (approximate  ; 
date,  October,  1911),  illustrates  the  futility  of  labor  laws: 

“Our  factory  inspectors  are  investigating  these  charges,” 
said  Chief  Whitney  of  the  State  Police.  “Any  employer 
whom  we  find  violating  the  labor  laws  of  the  commonwealth 

will  be  prosecuted . .  The  department  is  doing  its  best 

to  punish  the  violators,  but  ....  the  women  and  children 
who  are  suffering  as  the  result  of  these  violations  do  not 

complain  to  this  office . They  are  even  afraid  to  give 

us  any  assistance  in  our  investigations.” 

May  I  ask  here  what  help  the  commonwealth  gives  to  the  women  and 
children  who  lose  their  jobs. 


LECTURE  III— WAGE  SEAVERY:  CAUSE  AND  CURE. 


SI 


your  way?  Do  you  think  that  this  price  for  buying  him  over 
to  neutrality  too  high  for  you  to  pay?  If  I  were  you,  I  would 
gladly  pay  even  half  of  my  income  to  buy  over  so  dangerous 
a  foe.  He  should  have  no  business  standing  there  outside 
your  factory  gate,  an  unconscious  but  irresistable  weapon  in 
the  hands  of  your  employer,  for  use  against  you.  Cost  what 
it  may,  you  have  to  get  him  out  of  your  way.  All  he  wants  is 
employment,  and  work  or  no  work  you  must  give  it  to  him. 
If  you  have  no  work  to  give  him  to  earn  his  wages  from,  you 
must  pay  it  from  your  pocket  as  a  dead  loss,  and  even  at  five 
cents  to  the  dollar  you  will  find  it  an  extremely  profitable  bar¬ 
gain  ;  and  the  sooner  you  do  it,  the  better  will  it  be  for  your  own 
sake.  For  the  time  is  fast  approaching  when  ten  cents  will 
not  suffice  and  by  that  time  you  will  not  have  even  one  cent 
to  spare.  The  time  for  starting  the  Guaranteed  Employment 
Bureau  is  now  and  you  have  not  a  day  to  lose.  In  fact  it  is 
already  late ;  ten  years  ago  one  cent  to  the  dollar  would  have 
been  enough. 

104.  “What  work  can  you  give  to  your  employees? 
Will  you  set  them  to  dig  holes  and  fill  them  up?”  I  am  ex¬ 
tremely  thankful  for  the  suggestion ;  of  course  you  meant  it  for 
a  sarcasm,  but  I  intend  to  take  it  seriously.  As  I  said  in  an¬ 
swering  the  previous  objection  it  is  no  part  of  my  duty  to  sug¬ 
gest  a  scheme  of  work,  and  I  ought  not  be  compelled  to  do  it. 
But  nobody  seems  to  be  inclined  to  respect  my  rights  in  this 
respect.  I  have  been  repeatedly  and  persistently  challenged 
to  suggest  some  profitable  work  without  which  my  scheme  is 
in  danger  of  not  beinp*  regarded  seriously.  The  suggestion, 
made  by  the  questioner  has  saved  me  from  the  danger.  It  is 
one  of  the  cleverest  schemes  that  human  ingenuity  has  in¬ 
vented.  First  the  work  is  unlimited  and  can  absorb  any 
amount  of  labor  without  producing  any  useful  results ;  for 
the  one  great  dread  of  our  industrial  svstem  is  the  dread  of 
over-production!  Digging  holes  and  filling  them  up  will  pro¬ 
duce  nothing,  and  there  is  no  fear  of  competitive  rivalry ! 

105.  Secondly  it  will  serve  as  a  crucial  test  to  discrim¬ 
inate  between  a  real  worker  and  an  idler,  who  professes  to  be 
a  willing-  worker  out  of  work.  A  real  worker  will  tuck  up  his 
sleeves,  take  up  his  spade,  and  start  digging  right  away ; 
whether  the  work  is  productive  or  no  is  not  his  concern.  The 


92  THE  UNEMPLOYMENT  PROBLEM, 

idler  will  invent  an  excuse  and  sneak  away.  While  discuss¬ 
ing  the  unemployment  problem  I  have  always  found  my  way 
blocked  by  the  loafer  problem,  Amono-  the  unemployed,  there 
always  are  and  always  will  be.  some  loafers  who  do  not  want 
to  work.  “What  are  you  going  to  do  with  these  human 
drones/'  is  the  problem.  I  will  set  them  to  dig  holes  and  fill 
them  up.  It  is  a  complete  solution  of  the  loafer  problem. 
With  any  other  kind  of  work  the  loafer  has  a  chance  of  shirk¬ 
ing.  Any  work  intended  for  profit  would  necessarily  suffer  in 
the  hands  of  a  loafer,  and  he  would  always  hope  that  the  em¬ 
ployer  would  in  his  own  interest  give  the  work  to  Somebody 
else,  and  leave  him  free.  With  digging  holes  the  loafer  has  no 
chance  whatever ;  he  can’t  spoil  anything  except  his  Own 
chance  of  getting  lighter  and  more  respectable  work  later  on. 
He  must  make  u^  his  mind  to  improve  himself  and  fall  in  line 
with  the  workers  or  fall  out  of  the  System  and  starve. 

106.  Thirdly  the  dig-hole  scheme  will  have  a  healthy  ef¬ 
fect  on  the  workman  in  keeping  his  muscles  in  good  working 
condition.  At  present  a  workman  out  of  work  gets  scantv 
food  ;  worry  and  want  of  work  degenerates  his  nerves  and 
muscles  so  that  when  he  gets  work  after  some  days,  his  work¬ 
ing  power  is  considerably  impaired.  Digging  holes  will  keep 
his  muscles  well  exercised,  his  mind  free  from  anxiety  and 
his  appetite  in  healthy  state.  Digging  holes  and  filling  them 
up  for  the  sake  of  health  and  practice,  is  not  a  new  invention. 
It  is  in  use  in  the  armies  and  navies  of  the  world.  During 
periods  of  no-work  the  men  are  required  to  ring  noiseless  bells, 
to  ride  wooden  horses,  to  kill  lifeless  pigs,  and  to  fight  mock- 
fights,  all  for  the  sake  of  keeping  the  workmen  in  good  work¬ 
ing  Condition.  If  digging  holes  is  good  for  the  army,  it  is  at 
least  as  good,  for  men  in  other  trades. 

107.  But  by  far  the  greatest  merit  of  the  “dig-hole 
scheme"  lies  in  its  absurdly  foolish  and  unprofitable  character. 
It  will  show,  as  nothing  else  will,  how  unworthy  of  office  are 
those  who  organize  and  control  industry, — the  “men  of  abil¬ 
ity"  as  they  Call  themselves.  These  people  claim  higher  wages 
as  reward  for  ability,  and  we  are  called  upon  to  swear  alleg¬ 
iance  to  this  Nebuchadnezzar  idol  for  the  blessing  it  is  sup¬ 
posed  to  bring  to  the  world.  If  digging  holes  is  all  they  can 
invent  to  keep  a  willing  and  needy  workman  at  work,  it  is 


LECTURE  III— WAGE  SLAVERY:  CAUSE  AND  CURE. 


93 


time  they  change  their  trade^  and  we  will  try  to  see  if  we 
could  not  possibly  invent  something  better.  Digging  holes ! 
That  is  what  we  are  doing  on  an  extensive  scale  today.  Here 
is  a  man  out  of  work  and  unable  to  get  a  legitimate  work,  he 
becomes  a  criminal  and  sets  a  whole  army  of  police,  lawyers, 
judges,  jurors,  newspaper  reporters  to  run  after  him.  What 
profitable  results  have  you  to  show  for  this  work?  Is  this  or  is 
this  not  digging  holes  without  being  half  so  harmless.  It  is 
digging  holes  in  the  moral  ground  of  the  nation  and  leaving 
them  unfilled.  During  my  stay  in  Massachusetts  I  heard  that 
the  Knowles  Blake  pump  foundry  has  women  workers  in  the 
ccre-room.  The  Boston  newspapers  moved  heaven  and  earth 
to  awaken  the  commonwealth  of  Massachusetts,  and  a  bill  for 
non-employment  of  women  in  the  foundries  was  expected  to 
come  ud  for  discussion  during  the  next  5sessiom  What  be¬ 
came  of  the  bill  I  do  not  know  and  I  never  tried  to  find  out. 
Let  us  suppose  for  the  sake  of  argument  such  a  law  to  be  en¬ 
acted,  what  will  be  the  result?  The  women  workers  will  be 
dug  out  of  factories  and  men  workers  will  be  filled  in,  but  in 
every  other  respect  things  will  be  just  what  they  are  or  per¬ 
haps  much  worse.  The  men  out  of  work  today,  beg  or  steal  — 
that  is  the  worst  they  can  do.  But  the  women  turned  out  of 
work  might  do  what  the  men  cannot ;  they  might  turn  the 
white-way  into  a  red  light  district. 

108.  Digging  holes  and  filling  them  up !  Foolish  as  the 
scheme  is,  beyond  doubt  it  is  incomparably  superior, — mor¬ 
ally,  physically,  and  even  economically, — to  what  we  are  doing 
today.  Here  is  an  army  of  men  adulterating  foods  and  drinks, 
ir.  order  that  they  may  be  able  to  under-sell  their  rivals,  and 

5.  The  following  news  items  from  two  Boston  papers  (October, 
1911)  will  prove  instructive: 

T.  “Women  Coreworkens — Advisability  of  their  employment  dis¬ 
cussed  before  the  Committee  on  Labor.” 

The  advisability  of  permitting  women  to  be  employed  in  core- 
rooms  in  this  commonwealth  was  discussed  at  length  before  the 
committee  on  labor  the  principle  feature  being  the  presence  of  a 
score  or  more  of  the  women  and  girls  who  are  at  present  working 
in  rooms  of  this  character,  in  various  establishments  in  greater  Boston. 
a!1  appearing  in  opposition  to  the  biU.” 

TT.  “One  of  the  members.  Mary  Mardini.  fore-woman  in  the  co»*e- 
room  of  the  Blake  Pump  Works,  addressed  the  meeting  and  strenuously 
opposed  the  prohibition  of  women  core-makers.” 


94 


the:  UNEMPLOYMENT  PROBLEM. 


get  employment,  and  here  is  another  army  of  men  trying  to 
detect  and  punish  the  first  army.  Is  not  this  digging  holes 
and  filling  them?  And  who  pays  for  this  work?  You,  Mr.  Wage 
Earner,  you  are  paying  for  it,  and  what  is  worse,  you  have 
absolutely  no  control  over  the  work  for  which  you  pay,  or  a 
voice  to  decide  how  much  you  should  pay  for  it.  Foolish  as 
the  “dig-hole-and-fill-them”  scheme  is,  vou  Mr.  Wage  Earner 
have  the  least  right  to  take  me  to  task  for  it.  Later  on,  after 
I  have  finished  this  series  of  lectures,  I  intend  in  another  series 
to  make  some  practicable  suggestions  as  to  the  work  that  may 
be  profitably  offered  to  the  employees  of  the  Guaranteed  Em¬ 
ployment  Bureau;  but  at  this  stage  I  studiously  and  delib-  ' 
erately  refuse  to  do  it.  My  scheme  is,  Guaranteed  Employ¬ 
ment-work  or  no  work  and  I  mean  to  stand  by  it.  If  you 
can  find  out  some  work,  it  is  to  your  own  advantage  to  do  so,  : 
but  if  you  cannot,  you  should  not  expect  me  to  help  you.  This  i 
is  my  argument :  Here  is  a  group  of  men  willing  and  able  to 
work ;  these  men  represent  an  enormous  amount  of  idle  energy  ; 
as  they  are,  they  are  a  source  of  greatest  danger  to  the  com¬ 
monwealth  ;  to  employ  them  without  having  any  profitable 
work  to  be  done  will  cost  you  something,  but  the  cost  is  very 
little  and  the  removal  of  a  serious  danger  is  an  enormous  I 
gain.  If  you  can  give  them  some  profitable  work,  it  will  be  a 
further  advantage,  but  even  if  you  cannot,  the  advantage  of 
getting  a  dangerous  element  under  your  control  is  worth 
being  paid  for,  and  even  if  you  have  to  pay  as  high  as  five  cents 
to  the  dollar,  it  will  still  be  a  very  profitable  bargain.  There¬ 
fore  I  say  that  all  the  unemployed  in  the  United  States  must 
be  employed  right  away  without  any  further  delay,  and  the  1 
the  cost  of  this  employment  must  be  borne  by  the  wage  earner, 
in  the  form  of  a  tax.  If  you  can  earn  back  a  part  or  even  the 
whole  of  the  cost  by  profitable  work,  there  is  no  reason  why 
you  should  not  do  it.  But  this  is  a  secondary  consideration 
and  not  an  important  part  of  the  Guaranteed  Employment 
Scheme. 

109.  Here  is  another  objection:  the  American  wage  earn¬ 
er  is  a  practical  man  of  business.  You  can  never  persuade 
him  to  part  with  his  dollar  unless  you  could  first  convince  him 
of  his  getting  two  dollars  in  return.  Therefore,  unless  you 
have  some  profitable  work  to  show  as  part  of  your  scheme,  j 


LECTURE  III— WAGE  SLAVERY:  CAUSE  AND  CURE. 


95 


you  need  not  expect  him  to  sympathize  with  your  ideas  and 
support  your  scheme.  A  very  strong  objection  indeed.  The 
American  wage  earner  a  practical  man  of  business!  This  is 
unexpected  news.  Do  I  understand  that  every  American  wage 
earner  gets  two  dollars  as  wages  for  every  dollar’s  worth  of 
work?  I  never  knew  it.  As  far  as  my  information  goes  he  gets 
half  a  dollar  as  wages  for  every  dollar’s  worth  of  work  and 
very  often  not  even  as  much.  You  are  not  the  man  of  busi¬ 
ness  you  profess  to  be,  you  Mr.  American  Wage-Slave.  Slave? 
No!  No!  No!  I  am  sorry  for  using  that  word;  permit  me  to 
correct  myself  without  further  delay.  In  calling  the  wage 
earner  a  "slave”  I  have  thoughtlessly  insulted  the  desecrated 
image  of  God,  the  poor  oppressed  sample  of  humanity,  the 
slave,  who  when  chance  made  it  possible,  gave  to  the  world 
a  Joseph,  a  Kutubuddin,  an  Aesop,  or  a  Toussaint  L’overture. 
The  manacled  body  of  a  slave  had  a  free  soul  within,  but  you, 
Mr.  Wage  Slave  are  a  slave  body  and  soul,  just  free  enough  to 
sell  yourself  and  no  more,  and  even  this  freedom  you  fling 
away  and  offer  yourself  for  sale  and  pray  that  you  might  be 
purchased  in  preference  to  somebody  else.  You  offer  your 
wives  and  children  to  be  sold  to  your  bread  master,  to  be  har¬ 
nessed  to  the  machines  and  for  this  great  achievement,  you 
claim  to  be  called  a  practical  man  of  business!  Well  I  take 
you  at  your  word.  As  long  as  the  unemployed  are  standing 
outside  your  factory  gate,  waiting  for  a  chance  to  take  your 
place,  you  w:U  remain  a  slave.  If  you  value  your  freedom  and 
wish  to  be  able  to  treat  with  your  employer  on  terms  of  equal¬ 
ity,  instead  of  your  present  unconditional  submission  to  what 
he  dictates,  you  must  pay  the  proper  price  for  it.  If  you  are 
the  man  of  business  you  profess  to  be,  you  ought  to  have  no 
difficulty  to  see  your  own  interest  in  providing  for  the  unem¬ 
ployed.  I  may  also  add  that  the  small  cost  of  your  liberty  will 
soon  be  compensated  by  a  raise  in  your  wages,  so  that  as  a 
matter  of  business  you  lose  nothing  at  all  and  your  gain  of 
freedom  is  an  enormous  gain. 

110.  The  objection  that  there  is  not  enough  work  is  not 
a  fair,  honest,  and  straight-forward  objection.  There  is 
another  objection  at  the  back  of  this  objection  which  the 
opponent  does  not  want  to  show  himself  with  ;  he  is  there¬ 
fore  trying  to  hide  himself  behind  this  objection.  Work  is  not 


96 


THIS  UNEMPLOYMENT  PROBLEM,  i 


the  real  question.  The  real  question  is  “who  is  to  pay?”  In 
asking  persistently  to  show  what  work  could  be  given  for  the 
unemployed  the  opponent  hopes,  that  if  you  could  show  the 
work  he  would  immediately  escape  all  further  responsibility ;  - 
for  whoever  profits  by  the  work  must  pay  the  wages.  There 
the  question  ends.  The  opponent  wants  to  dodge  himself  out 
of  his  duty  of  providing  for  the  unemployed.  That  is  one  rea-  1 
son  why  I  have  so  persistently  refused  to  answer  the  ques¬ 
tion,  not  that  I  am  unable  to  answer  it.  If  the  people  of  the 
United  States  accept  my  theory  and  adopt  my  scheme,  they  f 
will  have  to  begin  it  as  a  matter  of  duty,  and  of  social  policy  j 
for  the  welfare  of  the  commonwealth,  not  for  the  economic  I 
equivalent  of  what  they  pay  but  for  the  other  important  re¬ 
sults  that  are  expected  to  follow,  and  more  than  that,  to  right  ! 
a  wrong,  to  do  social  justice,  to  give  to  the  unemployed  what  I 
belongs  to  them.  They  will  have  to  pay  for  maintaining  the  | 
bureau  just  as  they  are  paying  for  the  army,  navy,  and  police, 
for  the  moral  and  economic  welfare  of  the  commonwealth. 

111.  Once  the  workers  realize  that  it  is  their  moral  duty 

to  pay  and  that  it  is  to  their  own  interest  to  pay,  there  will  be 
no  more  questions  asked  as  to  what  the  work  shall  be.  There 
is  never  any  difficulty  to  find  work.  Anybody  could  find  work,  j 
and  useful  work  too,  for  all  the  workers  in  the  world  if  some¬ 
body  else  would  guarantee  the  payment  of  the  wages.  The  . 
finding  of  useful  work  is  no  problem  at  all.  The  whole  prob-  j 
lem  is  one  of  wages :  who  should  pay  the  6wages?  I  have  stated 
my  views  and  given  my  reasons :  The  working  class  must  i 
bear  all  the  financial  burden  for  the  relief  of  the  unemployed.  j 
What  has  the  working  class  to  say  to  that  proposition?  The  | 
Socialist  Party  claims  to  be  the  spokesman  of  the  working  j 
class  and  the  custodian  of  the  working  class  interests.  L,et  us  j 
see  what  they  have  to  say  in  the  interests  of  the  working  jj 
class.  .  : 

112.  The  23rd  of  August,  1914,  was  scheduled  as  the  date 
for  the  beginning  of  an  International  Congress  of  the  Socialist  * 

6.  The  Socialist  Party  in  its  National  platform  in  1912  savo  j 
nothing  whatever,  as  to  where  the  waees  should  come  from.  From  j 
their  political  demands,  it  seems  that  they  hold  the  capitalist  should 
bear  the  financial  burden,  but  article  9  of  their  industrial  demands 
make  this  inference  rather  doubtful. 


LECTURE;  III—WAGR  SUAVRRY:  cause:  and  cure:. 


97 


Party  to  be  held  in  Vienna,  Austria.  A  part  of  the  intended 
working  program  of  that  Congress  referred  to  the  unemploy¬ 
ment  problem.  The  sudden  outbreak  of  the  war  a  few  weeks 
before  the  appointed  time  made  the  meeting  in  Vienna 
impossible.  The  program,  therefore,  remains  a  tentative 
issue  to  this  day,  but  as  M.  Ed.  Vaillant,  the  French  delegate 
wrhose  duty  it  was  to  collect  the  necessary  information  and  to 
submit  his  report,  had  consulted  the  Socialist  parties  of  all 
countries  before  drawing  up  that  program,  there  is  a  moral 
certainty  that  it  represents  the  most  revised  expression  of 
Socialist  views  from  all  countries.  Section  eight  of  this  pro¬ 
gram  is  as  follows : 

“8.  Social  assurance  against  all  the  risks  of 
the  working  class  life  and  labor, — unemployment, 
accidents,  sickness,  invalidity,  infirmity,  old  age,  etc. 
without  working  man's  contribution,  and  managed 
quite  independently  by  the  unions  of  the  insured. 
Assurance  guaranteeing  to  all  those  insured  repara¬ 
tion  for  risks  undergone,  compensation  to  be  at  least 
equal  to  the  Droved  loss  of  working  capacity  or 
wages.  Establishments  of  all  institutions  and 
measures  for  the  prevention  of  risks.  Graduated 
tax  upon  capital  and  income  of  the  wealthy  class,  the 
provision  of  an  annual  credit  in  the  budget  of  neces¬ 
sary  sums  for  the  complete  working  and  develop¬ 
ment  of  social  insurance,  the  capitalized  funds  from 
the  employers  contributions  furnishing  the  useful 
complementary  sums." 

It  will  be  seen  that  the  Socialist  program  differs  from  the  one  I 
suggest,  in  two  points;  first, the  financial  responsibility  should 
not  rest  upon  the  working  class,  and  second,  that  it  should  fall 
upon  the  capitalists. 

7.  I  have  never  been  able  to  -see  why  the  Congress  of  1914  was 
impossible,  and  no  Socialist  papers  have  tried  to  explain  it.  I  can¬ 
not  see  why  the  executive  committee  could  not  have  arranged  for 
a  meeting  in  Norway,  Sweden  or  the  United  States,  either  for  the 
same  date  or  a  few  weeks  later.  It  is  possible  that  the  custodians  of 
the.  working  cla-ss  interests  did  not  care  to  hold  any  Congress  while 
their  wards  were  happy  at  their  jobs  of  grinding  out  munitions  for  the 
belligerents.  If  that  is  the  real  reason  we  should  not  expect  to  find 
it  anywhere  in  dry  ink. 


98 


THE  UNEMPLOYMENT  PROBLEM. 


113.  The  Socialists  contend  that  capitalism  is  the  cause 
of  unemployment  (although  this  is  really  in  conflict  with  the 
correct  theories  of  scientific  Socialism.)  If  capitalism  were  the 
cause  of  unemployment  it  would  be  but  fair  and  just  to  make 
capitalism  pay  for  the  consequences  caused  “by  the  misrule  of 
the  capitalist  8class.”  But  capitalism  does  not  cause  unem¬ 
ployment  and  it  would  be  unjust  to  punish  it  for  a  crime  it 
never  committed.  The  Socialists  must,  therefore,  reconsider 
and  revise  their  position  on  this  point.  For  similar  reasons  I 
maintain  that  the  working  class,  as  a  class,  is  responsible  for 
the  existence  of  unemployment  and  must  therefore  pay  for  its 
abolition.  Lastly  I  have  shown  that  it  is  to  the  interest  of  the 
working  class  to  have  a  system  of  guaranteed  employment 
maintained  at  any  cost,  and  cost  what  it  may,  the  workers  must 
pay  the  price. 

114.  But,  is  the  worker  able  to  pay  the  cost?  That  is,  of 
course,  a  very  important  question.  That  some  of  the  workers 
cannot  even  get  a  living  wage  is  indisputable.  But  such  star¬ 
vation  wages  will  not  be  taxed  at  all.  In  the  case  of  higher 
wages,  the  minimum  living  expense  will  first  be  set  aside  be¬ 
fore  any  tax  is  assessed.  It  is  only  the  workers,  best  able  to 
pay,  who  will  have  to  pay ;  the  rest  will  be  exempt.  What  is 
wrong  with  such  an  arrangement?  If  the  working  class  as  a 
whole  were  unable  to  pay  the  tax,  the  whole  scheme  would 
fall  through ;  but  is  the  working  class,  as  a  whole,  on  the  verge 
of  pauperism  and  unable  to  pay  the  tax?  Let  us  see. 

115.  The  United  States  is  rapidly  becoming  a  land  of 
strikes.  There  is  scarcely  a  day  in  the  calendar  without  a 
strike  taking  place  somewhere  in  the  nation.  How  are  these 
strikes  sustained?  Take  for  example  the  strike  at  the  General 
Electric  plant  in  Schenectady,  N.  Y.,  when  12,000  toilers  stop¬ 
ped  work  and  remained  at  home  for  over  three  weeks.  During 
this  time  they  did  not  earn  one  cent,  and  yet  they  lived  and 
spent  money.  It  is  quite  certain  that  neither  the  General 
Electric  Company  nor  the  Wall  Street  financed  that  strike.  1 
There  is  but  one  other  source  from  which  the  funds  arose ;  the 
workers  financed  the  strike.  It  is  impossible  to  deny  this. 

8.  National  platform  of  the  Socialist  Party  of  the  United  States, 


LECTURE  III— WAGE:  SGAVGRY:  CAUSE  AND  CURE- 


99 


If  the  workers  can  finance  these  continual  strikes  they  can 
finance  the  guaranteed  employment  scheme,  for  this  scheme 
is  nothing  more  than  a  strike  viewed  from  another  angle. 
Imagine  all  the  unemployed  gone  out  on  strike  and  refusing 
to  visit  the  factory  gate  on  a  no-wage  basis !  They  prefer  to 
stay  at  home  and  maintain  the  strike  until  conditions  of  work 
and  wages  in  the  factory  are  brought  to  a  more  satisfactory 
standard,  provided,  in  the  mean  time  that  the  workers  under¬ 
take  to  finance  the  strike.  Seen  in  this  light,  the  guaran¬ 
teed  employment  scheme  is  only  a  strike  in  the  interests  of 
all  the  workers,  both  employed  and  unemployed,  and  con¬ 
ducted  by  the  workers  without  work,  and  financed  by  the 
workers  with  work.  To  be  sure,  there  are  some  very  import¬ 
ant  differences  between  such  a  strike  and  one  of  the  usual 
kind.  In  the  first  place  there  will  be  no  scabs  in  this  strike, 
for  who  will  go  to  the  factory  gate  merely  to  tramp  up  and 
down  without  the  barest  hope  of  getting  a  job  when  he  is  as¬ 
sured  of  wages  by  just  sitting  home?  Then,  there  will  be  no 
pickets,  there  is  no  need  for  them ;  nor  will  there  be  any  police- 
made  riots  to  protect  the  scabs,  and  finally,  this  is  the  only 
kind  of  a  strike,  which  the  capitalist  will  not  fight  against. 
There  will  be  no  advantage  to  the  capitalist  to  fight  against  a 
strike  of  this  kind  and  he  could  not  fight  against  it  if  he  would. 
Against  such  a  strike  the  capitalist  has  as  much  chance,  as  a 
submarine  has  against  an  aeroplane. 

116.  Or  we  might  compare  the  guaranteed  employment 
scheme,  depending  upon  the  workers'  funds  to  the  trade 
unions.  The  employment  at  the  bureau  may  be  compared  to 
the  unemployment  benefit  and  the  tax  is  comparable  to  the 
union  dues.  If  the  workers  can  pay  dues  to  their  local  and 
national  unions,  they  can  certainly  pay  dues  for  the  unem¬ 
ployment  scheme.  It  is  not  difficult  to  see  from  this  analogy 
that  the  tax  for  the  guaranteed  employment  bureau  can  be 
and  must  be  paid  by  the  workers.  It  would  be  foolish  to 
expect  the  capitalist  to  pay  the  workers'  dues,  particularly 
when  the  purpose  of  the  dues  is  to  organize  a  fight  against 
him. 

117.  Nor  is  it  possible  to  make  the  capitalist  pay  the 
taxes.  It  may  be  desirable  to  make  him  pay.  It  may  be  desir¬ 
able  to  get  a  pie^e  of  pie  at  the  counter  and  make  the  cash- 


100 


the:  unemployment  problem. 


ier  pay  for  it, the  only  objectionable  feature  of  such  a  plan  is 
that  it  will  not  work.  In  the  same  way  the  worker  cannot 
tax  the  capitalist.  The  man  who  can  conceive  of  a  method  to 
tax  the  capitalist  is  not  yet  born.  Of  course  it  is  possible  to 
take  from  the  capitalist  the  whole  or  nearly  the  whole  of  his 
property  and  call  it  taxation,  just  to  please  one’s  fancy,  but 
that  is  not  a  tax  in  the  true  sense  of  the  term.  It  is  not  pos¬ 
sible  to  make  this  point  clear  without  entering  into  the 
theories  of  taxation.  I  therefore  leave  that  part  for  the  present 
and  content  myself  with  just  one  illustration  for  the  sake  of 
clarity.  The  intoxicating  drinks  of  this  country  are  taxed 
fairly  high.  Does  that  make  the  saloon-keeper  poor?  You 
know  that  it  does  not;  in  fact  the  saloon,  in  spite  of  the  heavy 
taxation,  is  a  very  profitable  venture.  The  reason  is  simple. 
The  capitalist  is  not  a  taxpayer.  He  is  merely  a  tax  gatherer. 
He  collects  from  his  customers  every  cent  that  he  pays  as  tax 
in  advance,  and  a  little  more.  He  collects  the  little  more  in 
two  ways ;  first,  to  his  duties  of  buyer  and  seller  is  now  added 
to  the  duty  of  tax  collector  and  he  adds  to  the  tax  his  share  of 
the  collector’s  fees  in  adjusting  the  prices  of  commodities; 
secondly,  he  does  not  know  exactly  how  much  of  the  com¬ 
modity  he  is  going  to  sell ;  he  can  collect  the  tax  only  on  what 
he  does  sell.  Therefore  he  has  to  keep  well  within  the  safe 
limit  by  distributing  the  tax  paid,  over  the  smallest  possible 
amount  of  his  commodity.  For  example,  if  a  saloon-keeper 
pays  $500.00  for  licensing  his  saloon,  he  may  distribute  this 
tax  over  5,000  bottles  of  whiskey.  If  then,  he  succeeds  in  sell¬ 
ing  6,000  bottles  he  will  have  collected  $600.00  as  a  tax.  All 
though  he  has  had  to  pay  the  government  only  $500.00.  All 
methods  of  taxing  the  capitalist  turn  out  to  be  in  the  long  run, 
but  methods  of  9giving  him  a  tax  instead.  An  attempt  to  tax 
the  capitalist  is  like  trying  to  empty  the  water  pipe  by  open- 

9.  “Indirect  taxes  add  to  the  price  of  goods  not  only  the  tax 

itself  but  also  the  profit  on  the  tax . Those  who  pay  -such  taxes  to 

the  government  seldom  or  never  ask  for  their  reduction  or  repeal, 

but  on  the  contrary  generally  oppose  such  propositions . The 

reduction  of  war  tax  on  whiskey  was  strongly  opposed  by  the  whis¬ 
key  ring  composed  of  great  distillers.  The  match  manufacturers 
fought  bitterly  the  abolition  of  tax  on  matches. — Henry  George:  Pro¬ 
tection  or  Free  Trade,  page  84. 


RECTORE  III— WAGE  SGAVERY^  CAUSE  AND  CURE. 


1D1 


in g  the  faucet  When  the  faucet  is  opened  it  is  not  the  pipe 
that  is  emptied,  but  the  reservoir  at  the  back  of  the  pipe.  Any 
tax  on  the  capitalist  is  automatically  transferred  to  the  real 
source  of  wealth,— the  labor  power  of  the  working-class.  It 
is  impossible  to  tax  the  capitalist  as  a  class.  In  all  cases  the 
worker  has  to  pay  it,  and  the  sooner  the  worker  recognizes 
this  fact  the  better  it  will  be  for  all  of  us.  Therefore,  consider¬ 
ing  all  these  reasons  I  am  compelled  to  take  a  stand  against 
the  Socialist  Party  program  of  taxing  the  capitalist.  The 
worker  must  pay  the  taxes ;  willy-nilly,  he  pays  them  anyway, 
and  it  would  be  much  to  his  advantage  if  he  would  understand 
it  at  the  outset,  and  accept  the  responsibility  with  open  eyes, 
a  cheerful  heart,  and  a  clear  conscience. 

118.  Another  method  very  popular  among  the  Social¬ 
ists,  though  it  has  no  support  in  the  theory  of  scientific  Social¬ 
ism,  a  method  which  for  that  reason  is  not  yet  officially 
recognized  by  the  party,  is  that  of  reducing  the  hours  of  work. 
Though  not  officially  recognized  this  method  is  steadily  grow¬ 
ing  in  popularity  and  is  being  supported  by  many  prominent 
Socialists.  The  following  extract  may  be  taken  as  a  fair  sample 
of  what  the  leading  Socialists  have  to  say  on  this  point : 

A  SHORTER  WORKDAY: 

It  would  necessitate  the  employment  of  a 
large  number  of  men  to  do  the  same  work,  using  the 
same  machinery 

“2.  By  thus  reducing  the  number  of  men  out  of 
work,  it  would  increase  effective  demand  for  labor  in 
proportion,  and  thus  have  a  tendency  to  raise  wages. 

“3.  By  increasing  the  average  wage  it  would 
Rave  a  tendency  to  reduce  the  relative  percentage 
of  profits  on  the  products  of  labor,  thus  increasing 
the  relative  purchasing  power  of  wages. 

“4.  By  shortening  the  hours  of  labor  it  would 
leave  the  workers  less  exhausted  at  the  close  of  the 
day,  and  more  capable  of  sustained  study  and  thought 
— more  capable  of  organization. 

“5.  Even  when  the  profit-takers  had  compen¬ 
sated  themselves  for  the  increased  wages  at  the  end 
of  the  day  by  taking  on  an  increase  in  price  at  the 
other  end,  the  improvement  in  the  condition  of  labor 


102 


THE  UNEMPLOYMENT  PROBLEM, 


and  life  would  be  a  net  and  permanent  gain — resulting 
in  the  absolute  progress  in  the  other  direction,  name¬ 
ly,  intelligent  self-control; ” — “Menace  of  Unemploy¬ 
ment/'  Winfield  R.  Gaylord. 

119.  As  to  the  advantages  of  paragraphs  4  and  5,  I 
should  certainly  be  in  favor  of  a  shorter  work  day;  that  is,  if 
those  advantages  would  accrue,  which  I  gravely  doubt.  But 
as  I  am  discussing  the  question  from  the  unemployment^ 
point-of-view,  I  will  waive  my  objections  and  concede,  pro¬ 
visionally,  that  these  two  advantages  would  follow  in  the  wake 
of  the  shorter  work  day.  But  I  cannot  leave  this  argument 
without  at  least  one  effort  to  remind  the  workers  that  as  long 
as  unemployment  remains  all  the  other  reforms  are  wasted 
efforts.  The  blight  of  unemployment  will  wither  every 
scheme  for  the  betterment  of  the  workers.  Take  for  example 
the  eight-hour  reform,  and  let  us  see  how  far  it  will  help  the 
worker  to  better  himself  by  study  and  thought.  The  eight 
hour  law  gives  him  no  more  security  over  his  job  than  he  had 
before ;  he  will  therefore  try  to  save  what  he  can  for  a  rainy 
day.  He  saves  two  hours  of  labor  time  from  the  factory,  and 
he  puts  in  this  time  doing  domestic  work,  such  as  planting 
cabbage  in  his  back  yard,  or  repairing  his  furniture  which  he 
would  have  given  to  another  worker  if  he  had  been  working 
at  the  factory.  Thus,  in  this  way  he  creates  an  equivalent 
amount  of  unemployment  for  another  worker.  And  he  does 
this  without  even  a  pretence  of  the  intellectual  betterment 
for  himself  that  the  two  extra  hours  of  leisure  are  calculated 
to  bring.  As  long  as  unemployment  remains  all  other  reforms 
are  impossible. 

120.  This  question  is  only  a  side  issue.  The  main  point 
is,  will  the  shorter  work-day  abolish,  or  even  appreciably 
diminish  unemployment.  I  maintain  that  it  will  not.  A  sim¬ 
ple  illustration  will  show  why  it  will  not.  Suppose  I  am  a  cap-  j 
italist  and  that  I  own  a  biscuit  factory.  I  employ  100  workers  i 
with  wages  averaging  $20.00  per  week,  with  a  ten  hour  day  and 

a  sixtv  hour  week.  Out  of  these  100  workers  only  40  are 
occupied  in  producing  the  biscuits  that  I  place  upon  the  mar¬ 
ket.  The  remaining  60  workers  do  not  produce  a  single  bis¬ 
cuit,  in  fact  they  produce  nothing  for  the  market  today.  Their 
work  consists  of  creating  means  and  developing  methods  of 


LECTURE  III— WAGE  SLAVERY:  CAUSE  AND  CURE- 


103 


production  for  future  use,  i.  e.,  for  industrial  development. 
For  instance  the  factory  chemist  is  trying  to  discover  a  better 
substitute  for  yeast,  or  the  engineer  is  occupied  in  planning 
a  new  building  or  installing  new  machinery.  At  first  sight  it 
would  appear  that  these  workers  who  produce  for  the  future 
are  few  in  number  and  that  I  have  exaggerated  a  little  too 
freely  when  I  said  that  60  workers  were  employed  in  non¬ 
productive  (i.  e.,  remotely-productive)  capacities.  I  have  not 
exaggerated  at  all;  in  fact  I  have  underestimated  a  little  in 
order  to  keep  within  safe  limits.  The  wages  of  the  chemist  are 
$200.00  per  week,  which  means  ten  average  workers  rolled  in 
one  and  the  same  is  true  of  the  engineers.  Out  of  the  men 
employed  in  producing  the  biscuit  for  the  market  some  get 
wages  as  low  as  $5.00  and  you  will  have  to  count  four  of  them 
as  one  worker.  It  is  easy  to  see  then,  that  as  economic  units, 
there  are  only  40  workers  (though  there  might  be  100  human 
beings  necessary  to  make  the  equivalent  of  40  average  work¬ 
ers),  employed  in  producing  goods  for  the  market,  i.  e.,  to  sat¬ 
isfy  the  demand  of  the  public  as  the  consumer.  It  is  also  easy 
to  see  that  there  are  60  average  workers  employed  in  indus¬ 
trial  development  work.  The  forty  producers  turn  out  bis¬ 
cuits  worth  $50.00  each,  so  that  after  paying  their  wages  I 
realize  a  profit  of  $30.00  per  head.  But  the  60  workers  em¬ 
ployed  in  development  do  not  bring  in  any  profit  at  this  time; 
their  work  will  bring  profit  in  the  future,  but  at  the  present 
time  I  cannot  market  their  product,  not  even  to  pay  their 
wages.  If  it  had  not  been  for  the  other  40  workers  who  creat¬ 
ed  goods  that  netted  me  $30.00  profit  per  head,  I  would  not 
have  been  able  to  maintain  the  other  staff  of  60.  In  fact  I 
employ  just  60  workers  for  the  simple  reason  that  my  profits 
are  just  enough  to  pay  the  wages  of  60  and  no  more.  The  field 
of  industrial  development  is  unlimited  in  extent,  and  so  prom¬ 
ising  of  results  in  future  that  I  would  gladly  employ  all  the 
workers  who  are  unemployed  all  over  the  world,  in  all  the 
trades  and  professions  if  I  could  only  discover  some  way  to 
pay  their  wages.  At  present  my  only  source  of  wages  is  the 
■profit  that  I  make  from  the  producers  and  I  can  employ  onlv 
GO  average  workers  because  my  present  rate  of  profit  is  only  60 
per  cent.  Now  imagine  the  work  day  to  be  shortened  to  8 
hours.  In  order  to  supply  the  market  I  will  have  to  put  10 


104  THE  UNEMPLOYMENT  PROBLEM 

more  men  on  the  production  side  and  pay  out  $200.00  a  week 
in  extra  wages  which  will  now  cut  down  my  profit,  and  I  will 
be  compelled  to  reduce  my  development  force  from  60  to  50. 
The  total  number  of  employed  is  neither  increased  nor  de- 
creased.  My  own  profits  are  cut  down,  I  must  admit  that; 
but  the  unemployment  problem  is  just  where  it  was  when  we 
started  and  that  is  what  I  wanted  to  prove. 

121.  This  illustration,  though  fictitious,  is  not  unreal  as 
it  represents  the  state  of  affairs  in  all  industries  where  cap-' 
italism  prevails.  The  division  of  the  industrial  army  into  its  j 
two  parts  is  not  always  so  definite;  for  example,  the  same  i 
manager  and  the  same  engineer  are  in  charge  of  production  as  ‘ 
well  as  development.  The  same  floor-sweeper,  the  same  gate- 
keeper  and  the  same  night  watchman  may  be  in  charge  of  the 
duties  of  both  departments.  Sometimes  the  extension  con-  j 
sists  merely  of  purchase  from  outside,  such  as  purchase  of  new  ■ 
machinery.  In  such  a  case  the  working  force  on  the  develop¬ 
ment  side  is  not  in  the  factory  at  all,  but  in  some  far  away 
factory  where  the  work  appearing  to  the  casual  observer  as  a t 
production  for  the  market  is  really  the  extension  work  of  the 
first  factory.  These  and  various  other  reasons  disguise  the 
fact  that  by  far  the  largest  part  of  industrial  armies  are  en¬ 
gaged  in  extension  work.  But  however  disguised,  the  fact  ! 
remains  that  all  the  surplus  labor  of  the  worker  which  con¬ 
stitutes  the  profit  of  the  capitalist  class  includes  in  all  cases 
the  foregoing  form  of  industrial  development.  Any  cutting' 
down  of  the  profits  must  necessarily  cut  down  industrial  de-  ! 
velopment  to  just  that  extent.  On  industrial  development,, 
not  on  mere  production  of  commodities,  for  daily  use,  is 
based  modern  civilization.  On  that  same  industrial  develop¬ 
ment  depends  also  the  far  more  advanced  type  of  the  civiliza¬ 
tion  of  the  future.  A  philosophy  which  claims  for  the  workers 
the  full  product  of  their  toil  or  the  social  equivalent  in  value, 
and  allows  no  deduction  for  new  industrial  development  is 
therefore  not  revolutionary,  but  reactionary.  It  is  worse  than 
this,  it  is  industrial  suicide.  In  all  the  popular  literature  on 
this  subject  the  workers  employed  on  the  development  side 
are  left  out  of  calculation.  The  writers  on  this  subject  have 
always  in  mind  only  the  labor  force  employed  for  necessities 
of  the  market.  They  are  right  when  they  argue  that  with 


ITCTURE)  III— WAGE  SLAVERY:  CAUSE)  AND  CURE- 


10? 


shorter  work-day  more  men  will  be  employed  on  the  produc- 
tion  side  and  that  is  the  only  part  of  industry  they  have  in 
view.  They  forget  that  every  additional  hand  on  the  produc¬ 
tion  side  means  one  less  on  the  development  side.  A  shorter 
work-day  is  no  solution  of  the  unemployment  problem,  what- 
e\  er  else  may  be  said  in  its  favor.  On  the  contrary,  para¬ 
doxical  as  it  may  appear — the  solution  of  the  problem  will 
be  found  to  be  in  an  effective  prologation  of  the  work-day.  It 
was  a  knowledge  of  this  fact  that  led  Marx  to  conclude  that 
"the  most  fortunate  conditions  for  wage  labor  lie  in  the  speedy 
increase  of  capital.” 

122.  In  all  fairness  to  the  philosophy  of  Socialism  I  must 
repeat  that  scientific  Socialism  does  not  stand  for  the  eight 
hour  law  on  the  ground  that  it  would  relieve  unemployment. 
It  advocates  the  eight  hour  day  and  recommends  the  working 
class  to  fight  persistently  for  this  right  but  for  an  entirely 
different  10reason,  and  one  which  it  would  be  here  entirely 
out  of  place  to  discuss.  As  to  taking  profit  and  investing  it 
into  new  development  work,  it  is  not  only  the  privilege  but 
according  to  Marx,  it  is  the  duty  and  the  ^function,  of  the 
capitalist ;  any  expenditure  of  this  profit  by  the  capitalist  for 
purely  personal  use  is,  in  his  opinion,  a  breach  of  duty,  or, 
rather,  a  down-right  I2“robbery.”  The  "purpose  to  give  to  the1 

10.  Marx:  Capital,  Vol  I,  page  25S. 

11.  I.  “A  certain  quantity  of  surplus  labor  is  required  for  the 
purpose  of  discounting  accidents,  and  by  (for?)  the  necessary  and 
progressive  expansion  of  the  process  of  reproduction  in  keeping  with 
the  development  of  the  needs  and  the  advances  of  population,  called 
accumulation  from  the  point  of  view  of  the  capitalist.  It  is  one  of  the? 
civilizing  sides  of  capital  that  it  enforces  this  surplus  labor  in  a  man¬ 
ner  and  under  conditions  which  promotes  the  development  of  the 
productive  forces,  of  social  conditions,  ,  ,  ,  ,  Marx:  Capital,  Voh 
III,  page  953. 

11.  “When  we  appropriate  capital,  we  must  at  the  same  time 
take  over  its  social  function.  The  most  important  of  these  is  the  ac¬ 
cumulation  of  capital.  Capitalists  do  not  consume  their  entire  in¬ 
come.  A  portion  they  lay  aside  for  the  extension  of  production.” — ' 
Kautsky:  Social  Revolution,  page  136. 

12.  “So  far  therefore  as  his  actions  are  a  mere  function  of  capital 
— endowed  as  capital  is  in  his  person,  with  consciousness  and  a  will — ' 
his  own  private  consumption  is  a  robbery  perpetrated  on  accumula¬ 
tion. — Marx:  Capital,  Vol  I,  page  649, 


106 


THE  UNEMPLOYMENT  PROBLEM. 


workman  all  they  13produce”  is  not  scientific  Socialism;  it  is 
either  unscientific  nonsense  or  scientific  individualism  accord¬ 
ing  to  the  spirit  in  which  it  is  said.  In  either  case  it  is  preach¬ 
ing  falsehood  in  the  name  of  truth.  No  one  who  understands 
scientific  Socialism  takes  exception  to  the  capitalistic  appro¬ 
priation  of  surplus  and  its  transformation  into  new  capital 
for  future  use.  It  is  recognized  as  one  of  the  greatest  elements 
of:  human  progress  and  redeeming  feature  of  capitalism.,  which 
according  to  scientific  Socialism  has  proved  to  be  a  failure 
its  everything  else.  According  to  this  view  the  capitalist  is  a 
14trustee  for  the  coming  generations  and  holds  for  them  in 
the  form  of  profit  their  share  of  coming  civilization. 

123.  Mr.  Gaylord,  in  arguing  that  the  shorter  work  day 
will  cut  down  profit  and  thus  increase  the  purchasing  power 
of  the  worker  betrays  his  ignorance  of  the  very  fundamental 
principles  of  scientific  Socialism.  The  purchasing  power  of 
the  worker  has  nothing  to  do  with  total  produce;  it  is  con¬ 
cerned  with  commodities  for  final  consumption  only.  To  re¬ 
turn  to  the  illustration  of  the  biscuit  factory.  The  wages  of 
the  workers,  that  is,  the  wages  of  all  the  100  workers,  are 
expected  to  be  sufficient  to  buy  the  total  produce  of  the  40 
biscuit  producers.  Nobody  is  supposed  to  buy  any  part  of 
what  the  other  60  workers  produce.  Under  capitalism,  the 
purchasing  power  of  the  worker  as  a  whole  is  always  ex-  ! 
actly  equal  to  the  total  produce  available  for  final  consump¬ 
tion.  It  is  neither  more  nor  less.  The  natural  law  of  value 
automatically  takes  care  of  that.  There  is  never  any  trouble, 
there  never  can  be  any  trouble,  about  the  purchasing  power 
of  the  workers  as  a  whole.  The  v/hole  trouble  lies  in  the 
unequal  distribution  of  the  purchasing  power  among  the 
workers,  and  cutting  down  the  profits  of  the  capitalist  cannot 
possibly  remedy  this  evil,  no  matter  how  much  the  profits 
are  cut  down,  whether  bv  taxation,  or  by  the  introduction  of 

13.  “The  purpose  of  Socialism  is  to  give  the  workers  all  they 
produce.” — Allan  Benson:  Truth  About  Socialism,  pa.ee  18. 

14.  “The  distinguishing  feature  of  capitalism,  the  keynote  of  mod¬ 

ern  progress,  is  the  enormous  accumulation  of  wealth,  which  con¬ 
stitutes  the  very  condition  of  existence  of  the  economic  -structure 
under  capitalism.  Under  that  system,  the  capitalist  becomes  in  a  sense,  ; 
a  trustee  of  society.” — Stone:  Intercollegiate  Socialist,  page  34,  ! 

March,  1916. 


LECTURE  III— WAGE  SLAVERY  :  CAUSE  AND  CURE* 


107 

the  shorter  work  day.  With  a  shorter  work  day  a  five  dollar 
hod  carrier  will  still  get  five  dollars  and  the  thirty  dollar  mech¬ 
anic  will  still  get  thirty  dollars  and  the  hundred  dollar  engi¬ 
neer  will  still  get  one  hundred  dollars.  The  purchasing  power 
will  be  distributed  as  unequqally  as  before.  Yet  it  is  easy  to 
see  that  if  the  workers  were  taxed  in  proportion  to  their  in¬ 
comes,  the  hundred  dollar  engineer  would  come  down  to 
ninety ;  the  thirty  dollar  mechanic  nearly  to  twenty-seven  and 
the  five  dollar  hod  carrier  would  suffer  no  reduction  at  alh 
Taxing  the  workers  would  at  least  have  some  effect — though 
not  much — toward  equalizing  the  purchasing  power  of  the 
workers,  (if  that  be  necessary),  but  cutting  the  profits  of  the 
capitalist  would  have  no  such  effect  whatever. 

124.  The  shorter  work  day  cannot  solve  the  unemploy¬ 
ment  problem.  The  emancipation  of  the  workers  must  come 
from  the  workers  themselves.  They  have  'created  unem¬ 
ployment  and  they  must  bear  the  cost  of  removing  it.  They 
are  the  beneficiaries  of  the  reform  and  they  must  pay  the  price 
for  their  emancioation.  Anv  other  scheme  for  skillfully  “ put¬ 
ting  it  over”  on  the  capitalist  is  doomed  to  failure.  You  can¬ 
not  tax  the  capitalist  as  a  class.  The  shorter  work  day  is  not 
altogether  impossible,  but  it  will  be  fruitless,  and  will  lead 
to  sad  disaopointment  if  any  relief  from  unemployment  is  ex¬ 
pected  to  follow  from  it.  The  profit  system  is  not  the  cause 
of  unemployment  and  any  attempt  to  strike  at  the  profits  will 
be  wasted  efforts.  THERE  IS  ONLY  ONE  WAY  TO 
EMANCIPATE  THE  WORKERS,  and  that  is,  BY  A 
SYSTEM  OF  GUARANTEED  EMPLOYMENT  FINAN¬ 
CED  BY  THE  EMPLOYED  WORKERS  for  the  equal 
benefit  of  all  the  workers  whether  employed  or  unemployed. 
This  is  what  I  mean  when  I  say  that  the  emancipation  of  the 
workers  must  come  from  the  workers  themselves.  It  must 
come  from  the  worker’s  own  brain,  and  brawn,  and  pocket- 
book;  there  is  no  other  way  but  this. 

125.  We  have  seen  thus  far,  that  it  is  the  duty  of  the 
worker  to  finance  the  Guaranteed  Employment  system,  and 
moreover  that  it  is  to  his  own  interest  to  do  it;  in  fact  that  it 
is  the  only  way  to  improve  the  condition  of  labor.  We  have 
also  seen,  that  at  least  to  some  extent,  the  worker  is  also  able 
to  bear  the  financial  burden.  But  the  question  still  remains: 


THE  UNEMPLOYMENT  PROBLEM. 


108 

"‘Can  he  bear  the  whole  burden ?”  The  success  of  the  scheme 
depends  entirely  upon  the  answer  to  this  question.  If  the 
worker  fails  to  come  up  to  what  is  expected  of  him ;  if  he 
breaks  down  under  the  burden  of  taxation  for  the  relief  of  the 
unemployed, ^then  the  unemployment  problem  cannot  be  solved. 
A  pr-aciiSaT solution  will  turn  out  ultimately  to  be  no  solu¬ 
tion  at  all,  for  unrelieved  residue  of  unemployment  will  breed 
more  unemployment.  The  worker  must  either  bear  the  whole 
burden,  or  none  at  all.  If  he  cannot  bear  the  whole  burden, 
he  need  not  bear  any ;  it  would  be  as  useless  as  building  a  dam 
half-way  across  the  river.  We  must  try  to  figure  out  first, 
Whether  the  worker  can  and  will  bear  the  whole  burden. 
Incidentally  we  must  also  find  out  how  much  that  burden  is 
going  to  be. 

126.  A  reference  to  the  theory  of  unemployment  al¬ 
ready  discussed  (see  Lecture  I,  para.  44)  will  show  that  the 
Worker  as  a  whole  is  always  able  to  bear  the  financial  burden 
for  the  relief  of  the  unemployed  as  a  whole,  no  matter  how 
small  or  how  large  that  army  of  unemployed  should  be. 
Every  penny  saved  corresponds  to  a  penny  worth  of  unem¬ 
ployment  somewhere ;  if  it  be  a  dollar  saved,  it  would  mean 
a  dollar’s  worth  of  unemployment.  The  amount  of  total  sav¬ 
ing  on  one  side  is  always  equal  to  the  total  amount  of  unem¬ 
ployment  on  the  other  side.  It  is  an  exact  mathematical  law 
which  allows  no  exception.  The  relation  of  saving  to  unem¬ 
ployment  is  like  the  relation  of  positive  and  negative  charges 
of  electricity.  The  relation  is  always  one  of  equality :  the  total 
positive  charge  is  always  exactly  equal  to  the  total  negative 
charge,  no  matter  how  one  of  the  charges  is  collected  and 
stored ;  nor  does  it  matter  whether  the  charge  is  collected  in 
one  place  or  scattered  over  a  large  number  of  conductors.  The 
positive  and  negative  charges  may  be  near  together  or  many 
thousand  miles  apart;  but  in  every  case  the  total  positive 
charge  is  exactly  equal  to  the  total  negative  charge.  The 
Same  law  applies  to  economics  and  with  the  same  amount  of 
exactness.  The  total  savings  of  the  workers,  and  therefore 
their  ability  to  relieve  unemployment  is  always  equal  to  the 
amount  of  unemployment  in  need  of  relief  for  example  before 
every  crisis,  as  was  pointed  out  by  Marx,  the  wages  are  high¬ 
est,  and  the  savings  of  the  workers  reach  the  maximum,  the 


lecture  in— wage:  suave:ry:  cause:  and  cure. 


109 


money  in  hands  of  the  capitalist  (except  what  he  holds  as 
deposited  savings  of  the  workers)  is  practically  nil,  and  the 
result  is  a  crisis.  In  the  industrial  depression  that  follows, 
wages  fall  away,  either  by  reduction  of  rate  or  by  long  periods 
of  unemployment;  the  savings  of  the  workers  are  exhausted, 
the  crisis  now  ends,  and  most  of  the  unemployment  disappears 
also.  The  amount  of  unemployment  in  need  of  relief,  and  the 
ability  of  the  workers  to  give  that  relief,  are  always  exactly 
equal.  The. question,  “how  much  the  financial  burden  is  going 
to  be”  cannot  be  answered,  for  it  depends  upon  the  amount  of 
unemployment,  which  varies  from  a  few  hundred  thousand  to 
several  millions.  But  there  is  no  need  to  answer  that  ques¬ 
tion.  We  know  that  the  ability  of  workers  to  relieve  unem¬ 
ployment  is  always  equal  to  the  need  of  the  unemployed,  and 
that  is  enough. 

127.  It  must  be  noted,  however,  that  the  ability  to  bear 
the  burden  is  sufficient  only  when  the  whole  ability  of  the 
workers  is  applied  collectively.  If  part  of  the  workers  refuse 
to  contribute  their  share  according  to  their  ability  the  scheme 
will  fail,  for  it  can  then  relieve  only  a  part.  The  unrelieved 
part  will  create  more  unemployment  and  spoil  the  whole  pro¬ 
gramme.  And  the  workers  recognizing  this  possibility  and 
the  futility  of  partial  efforts,  will  refuse  to  contribute  in  the 
first  place  unless  they  have  a  guarantee  that  when  they  con¬ 
tribute,  every  one  else  will  contribute  also.  Under  the  pres¬ 
ent  system  of  social  evolution  such  a  guarantee  is  possible  only 
b)  means  of  a  scheme  of  taxation  under  governmental  control. 
There  is  no  other  method  I  can  think  of,  that  will  carry  with 
il  a  guarantee  that  all  the  workers  will  pay  their  share.  The 
worker  as  a  whole  can  bear  the  whole  burden  if  you  can  find 
means  either  to  compel  or  to  persuade  him  to  do  his  share. 

128.  But  closely  connected  with  the  question  “can  the 
worker  bear  the  whole  burden?”  is  the  question  “will  he  bear 
it?”  It  is  a  question  of  psychology,  not  of  economics.  If  a 
man  has  only  a  five-cent-piece  in  his  pocket,  and  you  happen 
to  need  it  very  badly,  he  may  give  it  to  you  with  a  cheerful 
heart  and  even  thank  you  for  the  opportunity  you  gave  him 
to  render  you  a  useful  service.  If  he  happens  to  have  five 
dollars,  and  you  need  them  just  as  badly,  he  will  find  it  harder 
to  part  with  the  money,  he  may  easily  give  half  a  dollar,  i.  e., 


110 


the;  unemployment  problem. 


ten  per  cent.,  but  not  the  whole  five  dollars,  although  such  a 
sacrifice  will  not  place  him  in  a  worse  condition  than  the  giv¬ 
ing  of  five  cents  when  he  had  only  five  cents  to  give.  If  he 
had  500  dollars,  the  chances  are  that  even  ten  per  cent,  would 
be  difficult  to  part  with.  When  the  savings  of  the  workers 
and  consequently  their  ability  to  contribute  to  the  relief  of  the 
unemployed  are  the  highest  the  psychological  difficulty  of 
parting  with  the  money  is  also  the  greatest;  and  yet  it  is  just 
under  these  conditions  that  the  need  of  relief  is  most  acute,  and 
the  burden  of  relief  that  the  workers  are  expected  to  bear  is  also 
the  heaviest. 

129.  Fortunately  the  problem  carries  its  own  solution. 
Between  a  wave  of  industrial  prosperity  when  the  wages  are 
highest  and  the  savings  accumulate,  and  the  succeeding  crisis, 
when  millions  are  thrown  out  of  work,  there  is  a  short  period 
of  transition.  This  period  of  transition  is  a  result  of  the  credit 
system,  and  a  by-product  of  capitalism.  During  the  wave 
of  prosperity  the  worker  is  able  to  save,  and  he  generally  de¬ 
posits  his  savings  in  the  bank.  The  capitalist  borrows  this 
money,  and  uses  it  to  keep  the  industry  going  on;  the  savings 
of  the  worker  accumulate;  the  debt  if  the  capitalist  also  keeps 
piling  up,  until  it  exceeds  his  credit.  Then  comes  the  crash  ; 
some  capitalists,  unable  to  borrow  more,  are  compelled  to  shut 
down  their  work.  This  is  the  beginning  of  the  crisis.  This  little 
unemployment  is  the  starting  point  of  more  unemployment 
which  constitutes  the  crisis.  During  the  period  of  transition, 
and  even  later  during  the  early  stages  of  the  crisis  there  is 
very  little  unemployment  calling  for  relief.  At  this  stage  it 
is  very  easy  to  relieve  unemployment,  for  the  amount  needed 
for  relief  is  very  small,  and  the  worker  is  then  best  able  to 
pav.  If  the  first  batch  of  unemployed  be  promptly  and  ef¬ 
ficiently  relieved,  the  crisis  will  be  effectively  arrested,  for  a 
crisis  is  only  unemployment  coming  down  with  a  rush.  It  is 
like  using  the  lightning  conductor  to  prevent  a  lightning 
stroke ;  the  accumulated  electricity  has  to  be  removed  in  some 
way;  the  conductor  gradually  and  imperceptibly  carries 
away  the  accumulated  electricity,  relieves  the  tension,  and 
averts  the  crash.  The  Guaranteed  Employment  Bureau, 
armed  bv  the  power  to  tax,  will  graduallv  take  away  the  sav¬ 
ings,  relieve  unemployment  as  fast  as  it  comes  to  the  sur 


EECTURE  III — WAGE  SEA VERY:  CAUSE  AND  CURE. 


Ill 


face,  avert  the  crisis,  and  the  subsequent  paralysis  of  industry. 

130.  in  any  country,  the  proper  time  to  start  the  Guar¬ 
anteed  System  is  when  ttiat  country  is  m  a  wave  of  prosperity, 
approaching  the  peak  of  the  wave,  before  the  depression  be¬ 
gins.  The  United  States  is  at  this  moment  passing  through 
such  a  wave.  There  is  practically  no  unemployment  any- 
wnere;  workers  are  everywhere  in  demand.  The  capitalists 
are  afraid  of  strikes,  and  are  trying  to  propitiate  the  work¬ 
ers,  by  concessions,  bonuses,  and  promises.  Two  years  ago, 
wiienever  industrial  relations  were  strained,  and  a  strike  was 
in  view,  it  was  the  workers  who  pleaded  for  arbitration.  The 
capitalist  turned  away  with  real  or  feigned  indifference.  They 
said  they  had  nothing  to  arbitrate.  Today,  it  is  the  capital¬ 
ists  who  plead  for  arbitration,  and  the  workers  who  refuse  to 
arbitrate.  They  are  conscious  of  their  transient  power,  and 
are  trying  to  make  the  best  of  it  by  making  greater  and  great¬ 
er  demands.  There  is  certainly  a  great  crash  ahead,  every¬ 
body  knows  this  much,  but  nobody  seems  to  know  how  to 
avert  it.  In  the  meantime,  workers  are  trying  to  save  what 
they  can,  so  as  to  be  able  to  face  the  crash  when  it  comes, 
blissfully  unconscious  of  the  fact,  that  by  their  saving  they  are 
actually  helping  to  make  the  crash.  Between  the  present  pros¬ 
perity  and  the  coming  cisis,  there  is  the  period  of  transition 
which  may  last  a  year  or  two,  or  perhaps  only  a  few  months. 
The  time  to  start  the  Guaranteed  Employment  Bureau  is  now; 

not  a  day  to  lose.  If  once  the  crisis  begins,  and  the  first 
group  of  unemployed  remains  unrelieved  for  an  appreciable 
length  of  time,  there  will  be  in  a  few  weeks  from  Jive  to  ten 
million  workers  out  of  work.  It  will  then  need  from  10  to 
15  per  cent,  of  the  employed  workers’  wages  to  help  the  unem¬ 
ployed  ;  and  although  it  will  be  even  then  possible  in  theory 
for  the  workers  to  contribute  that  amount,  it  would  be  im¬ 
possible  to  persuade  them  to  pay  it.  For  in  the  face  of  the 
crisis,  no  worker  will  have  the  courage  to  give  away  a  large 
part  of  his  income,  to  help  others  when  he  may  himself  need 
help  any  minute. 

131.  If,  on  the  contrary,  the  Guaranteed  Employment 
Bureau  were  started  now,  a  tax  of  not  exceeding  two  per  cent, 
will  place  in  the  hands  of  the  bureau,  a  sufficient  sum  to  em¬ 
ploy  the  first  batch  of  unemployed  as  soon  as  they  happen  to 


112 


THE  UNEMPLOYMENT  PROBLEM. 


be  thrown  out  of  work.  Prompt  and  efficient  relief  of  the  first 
batch  will  have  the  effect  of  restoring  confidence.  The  work¬ 
ers  will  no  longer  try  to  save  feverishly,  and  thus  precipitate 
the  crisis.  With  increase  of  workers’  expenditure,  the  demand 
will  increase,  and  crisis  will  be  averted,  at  least  for  a  time.  In 
the  meantime  the  funds  in  the  hands  of  the  bureau  will  again 
begin  to  increase,  and  its  credit  will  improve.  With  in¬ 
creased  confidence  in  the  efficiency  of  the  bureau  the  fear  of 
unemployment  will  pass  away,  and  with  it  the  motive  for  sav¬ 
ing,  and  consequent  manufacture  of  crisis.  A  little  unemploy¬ 
ment  there  will  always  be — due  to  anarchy  of  consumption,  but 
the  bureau  could  easily  handle  that  proposition. 

132.  This  nation  has  at  this  moment  a  unioue  oppor¬ 
tunity  to  introduce  this  reform.  “Revolution”  I  ought  to  have  j 
said,  for  this  change  from  individual  to  social  thrift  is  noth¬ 
ing  short  of  a  revolution,  which  will  entirely  alter  the  whole 
social  structure.  But  as  the  word  “revolution”  is  associated 
in  popular  imagination  with  blood  and  thunder,  even  when 
the  revolution  revolutes  nothing,  I  will  be  content  to  use  the 
word  reform.  The  nation  is  at  this  moment  in  a  wave  of  un¬ 
precedented  prosperity.  The  war  in  Europe  has  for  the  time 
arrested  the  stream  of  immigration  which  simplifies  the  work. 
For  although  in  the  long  run,  the  need  of  the  immigrants  is 
sure  to  create  work  and  thus  balance  the  increased  supply  of 
labor,  yet  a  sudden  arrival  of  a  few  million  people  into  the 
labor  market  just  when  we  begin  to  re-arrange  our  affairs 
would  seriously  interfere  with  our  plans,  and  obstruct  the 
scheme  of  reform.  There  is  a  tide  in  the  affairs  of  nations  as 
of  individuals,  which  if  taken  at  the  flood  carries  them  to  for¬ 
tune.  Such  a  tide  we  have  at  present — the  opportunity  is  too 
good  to  repeat  itself.  The  statesmanship  of  the  American 
leaders,  and  the  intelligence  of  the  American  workers  is  on 
trial.  History  will  judge  how  they  acquit  themselves.  I  may 
add  that  the  American  capitalist  has  also  been  on  trial.  It  is 
his  duty  as  a  capitalist,  to  prolong  the  period  of  transition, 
and  postpone  the  hour  of  crash,  so  as  to  give  the  workers  a 
chance  to  organize  for  the  purpose  of  inaugurating  this  reform. 
Urged  by  an  inexorable  law,  against  which  he  cannot  revolt 
even  if  he  wanted  to,  he  is  trying  his  utmost  to  create  work, 
so  as  to  keep  the  wheels  of  industry  running  a  little  longer.  He 


LECTURE:  III— WAGE  SLAVERY:  cause  and  cure. 


113 


has  stimulated  the  demand  for  preparedness,  for  which  there 
is  no  real  justification  from  a  strictly  military  point  of  view. 
But  as  a  means  of  prolonging  the  period  of  transition,  and  of 
postponing  the  crisis,  it  is  impossible  to  think  of  a  better 
method.  Whatever  the  purpose  and  motive  of  those  who 
started  the  “preparedness”  policy,  it  is  no  doubt  rendering  a 
very  valuable  service.  It  seems  almost  as  if  the  Fates  have 
conspired  to  abolish  unemployment,  by  introduction  of  the 
Guaranteed  Employment  scheme,  by  offering  every  possible 
facility  to  inauguerate  the  reform. 

133.  There  is  one  more  objection  to  the  scheme  of  Guar¬ 
anteed  Employment,  which  comes  from  the  Socialists  and 
which  may  therefore  be  taken  up  at  this  point  with  advant¬ 
age.  According  to  the  Socialists,  when  capitalism  is  abolished 
and  when  the  workers  own  the  means  of  production,  they  will 
solve  the  unemployment  problem.  What  this  objection  ex¬ 
actly  means  I  do  not  know,  and  I  have  not  yet  met  a  Socialist 
who  feels  the  need  of  making  it  clearer;  there  is  their  objec¬ 
tion  :  take  it  for  what  it  is  worth.  If  they  mean  by  it,  that 
when  the  workers  own  the  means  of  production  they  will  have 
the  power  to  solve  the  problem,  I  should  certainly  agree  with 
them,  but  in  this  case  there  is  no  objection  to  answer.  They 
need  not  try  to  prove  that  they  will  possess  that  power ;  their 
power  is  not  in  question.  Why  talk  of  the  power  they  will 
have  after  they  own  the  means  of  production,  when  I  concede 
that  they  have  the  necessary  power  even  now.  Of  course,  I 
realize  that  they  are  no  more  conscious  of  their  power,  than 
the  elephant  is  of  his.  My  function  is  not  to  give  them  any 
new  power,  but  to  awaken  them  to  the  power  they  already 
possess.  If  they  cannot  use  the  power  they  have  now,  neither 
will  they,  when  they  have  more  power  in  future.  Uncon¬ 
sciousness  of  power  is  ever  the  strongest  chain  that  ties  the 
beast  to  his  master’s  yoke.  More  power  may  produce  more 
service,  but  it  does  not  necessarily  lead  to  more  freedom.  If 
the  worker  will  not  emancipate  himself  now  when  he  has  all 
the  power  he  needs  for  the  task,  neither  will  he  do  it  when  he 
has  more  power,  because  the  spirit  of  freedom  is  not  in  him. 

134.  But  if  the  Socialist  means  by  that  objection,  that  the 
worker  lacks  the  power  to  solve  the  problem  now,  and  that 
no  solution  of  the  unemployment  problem  is  possible  at  pres- 


114 


THE  UNEMPLOYMENT  PROBLEM 


ent,  then  I  shall  first  ask  him  to  prove  it.  It  might  be  a 
objection  worth  a  serious  consideration,  if  it  were  true;  bt 
is  it  true?  Where  are  the  proofs?  I  have  shown  that  capita 
ism  is  not  the  cause  of  unemployment,  and  therefore  its  abol 
tion  is  not  necessary  for  the  solution  of  the  problem.  If  as 
result  of  the  abolition  of  unemployment,  capitalism  passe 
away,  let  it  go — I  do  not  think  I  would  go  into  mourning,  an 
lament  its  death.  If  on  the  contrary  it  manages  to  live  an 
serve  society  in  some  other  way  let  it  stay.  I  have  no  quarrY 
with  it.  I  am  neither  for  it  nor  against  it.  But  even  assun 
ing  for  the  sake  of  argument  that  my  line  of  proof  is  not  su: 
ficient  to  convince  the  Socialist,  and  assuming  that  in  his  opir 
ion  our  efforts  will  fail,  what  then?  Even  then  there  is  no  ot 
jection  to  the  scheme.  If  the  workers,  united  as  workers  fc 
economic  emancipation,  fail,  the  mere  process  of  welding  tc 
gether  the  conflicting  elements  into  one  solid  mass,  with 
common  interest,  and  a  common  purpose,  will  still  be  a  decide  J 
gain;  what  has  the  Socialists  to  say  to  that?  Whether  th| 
scheme  succeeds  or  fails,  the  Socialist,  for  one,  can  have  not! 
ing  to  say  against  it. 

135.  Lastly,  if  the  objection  means,  that  after  the  work(  : 
gets  possession  of  the  means  of  production,  the  unemploymer 
problem  will  be  solved  so  easily,  that  it  would  be  a  waste  c  l 
time  and  energy  to  solve  the  problem  now,  then, — what  ther 
If  this  argument  means  anything  at  all,  it  means  that  all  ii 
dustrial  demands  of  the  workers  are  a  waste  of  time  an 
energy.  Under  Socialism  the  work-day  will  be  much  shorte 
than  at  present — four  hours  or  perhaps  only  two  hours,  a< 
cording  to  some  authorities  on  this  subject.  Does  it  mea 
that  the  movement  for  eight-hour-day  is  a  waste  of  time  an 
energy  and  that  the  Socialists  must  oppose  this  movement 
Under  Socialism  as  they  claim  there  will  be  no  child  labor,  n 
sweated  labor,  no  adulteration.  The  women  will  have  th  i 
right  to  vote ;  the  children  will  have  free  education,  the  ol 
will  be  pensioned, the  industries  will  be  safe  and  sane — no  fir< 
works  in  the  clothing  industry,  or  water  -works,  the  stock  ma 
ket.  Is  that  a  reason  why  these  things  should  be  tolerate 
without  a  protest  now?  Why  should  the  Socialist  fight  shouk 
er  to  shoulder  with  the  trade  unionist,  the  I.  W.  W.,  and  th 


lecture:  hi— wage  slavery*  cause  and  cure. 


115 


suffragist,  and  refuse  to  co-operate  with  the  army  for  abolition 
of  employment. 

136.  As  a  matter  of  fact  they  are  not  opposed  to  an  at¬ 
tempt  to  solve  the  unemployment  problem  now.  The  na¬ 
tional  platform  has,  "relief  of  the  unemployed/'  as  one  of 
their  express  demands.  The  opposition  to  this  scheme  from  the 
Socialists,  if  any,  will  be  only  from  such  Socialists  as  do  not 
know  what  they  are  talking  about.  There  will  be  no  objection 
to  the  scheme  of  Guaranteed  Employment  from  Socialists 
who  understand  Socialism.  If  you  hear  a  Socialist  opposing 
a  Guaranteed  Employment  scheme  to  be  introduced  right 
now  under  capitalism,  do  not  waste  your  time  and  his  time  in 
arguing  it  out;  tell  him  to  go  and  read  his  National  party  plat¬ 
form. 

"Unemployment. 

"The  immediate  government  relief  of  the  unem¬ 
ployed  by  extension  of  all  useful  public  works,  all  per¬ 
sons  employed  on  such  works  to  be  engaged  directly 
by  the  government." — National  Socialist  Platform, 
1912. 

Does  it  look  very  much  like  an  opposition  to  the  Guaranteed 
Employment  scheme?  No,  the  Socialist — if  he  is  really  a  So¬ 
cialist — cannot  be  opposed  to  the  scheme  as  a  whole,  thomgh 
we  will  have  differences  on  matters  of  detail. 

137.  There  are  a  few  other  objections  to  the  Guaranteed 
Employment  scheme  but  none  of  them  are  very  serious.  They 
are  mentioned  here  only  with  a  view  to  exhaust  this  part  of 
the  subject.  First  among  these  is  the  moral  effect  of  the 
Guaranteed  Employment  scheme.  It  is  urged  that  this  sys¬ 
tem  will  tend  to  make  men  lazy.  It  will  be  a  factory  manu¬ 
facturing  loafers.  People  will  leave  their  present  employ¬ 
ments  and  seek  employment  under  the  Guaranteed  Employ¬ 
ment  Bureau.  The  objection  is  easily  answered,  once  you 
accept  the  principles  that  underlies  the  formation  of  the  bureau. 
For  example  the  bureau  may  have  powers  to  hire  out  help  to 
employers  and  to  receive  commission.  The  employee  will  in 
this  case  have  nothing  to  gain,  for  the  bureau  will  probably  send 
him  to  the  same  work  and  keep  a  part  of  the  salary  as  com¬ 
mission.  By  leaving  his  place  the  man  will  have  to  do  the 
same  work  on  less  salary.  In  some  cases,  however,  the  sys- 


THE;  UNEMPLOYMENT  PROBLEM, 


JIG 

tern  will  have  a  distinct  advantage,  as  for  example  when  the  t 
wages  are  unreasonably  low ;  for  the  effect  of  the  bureau  will 
be  to  raise  wages.  The  employer  must  either  raise  the  wages  , 
or  close  his  work.  If  the  work  is  of  an  unprofitable  character, 
depending  for  its  existence  on  the  low  wages  of  helpless  work¬ 
ers,  the  sooner  it  is  stopped  the  better.  If  on  the  contrary 
the  work  be  necessary  and  profitable,  the  employer  will  pay 
higher  wages  to  retain  the  workmen  in  the  very  beginning  or 
will  let  them  go  and  take  them  back  from  the  bureau  on  higher 
wages.  In  most  cases  the  employer  will  prefer  the  former 
course.  The  idea  that  the  bureau  will  encourage  laziness  is  a 
mistake.  The  bureau  will  make  every  possible  effort  to  find  j 
work  and  when  everything  fails  they  may  even  have  recourse  i 
to  digging  holes  and  filling  them  to  keep  the  men  busy.  There 
will  be  no  need  of  going  to  this  extreme  but  it  is  necessary  to 
be  prepared  to  answer  all  objections,  real  and  imaginary/ j 
But  as  mentioned  before  there  will  be  no  need  of  such  an  ex-  j 
treme  provision  for  the  bureau  will  have  enough  profitable  I 
work  on  hand  as  will  be  explained  in  another  series  of  lectures. 

138.  Another  objection  against  Guaranteed  Employ¬ 
ment  scheme  is  that  nobody  will  make  an  effort  to  find  out 
work  for  himself.  Everybody  will  simply  walk  to  the  bureau 
and  get  employment — perhaps  for  doing  nothing — when  just 
at  this  moment  he  might  be  wanted  somewhere  for  work.  On 
the  one  hand  there  will  be  men  without  work  getting  wages 
for  nothing  and  on  the  other  hand  there  will  be  work  without 
men  to  do  it.  It  is  rather  a  strange  sort  of  objection  to  deaf 
with,  for  it  is  no  objection  at  all ;  it  is  one  of  the  merits  of  the 
scheme  that  has  been  presented  in  the  form  of  an  objection. 
Let  us  compare  what  happens  today  with  what  would  hap¬ 
pen  under  the  Guaranteed  Employment  scheme  with  a  con¬ 
crete  illustration.  A  window  cleaner  leaves  his  home  in  the 
morning  and  goes  from  door  to  door  in  search  of  work.  He 
has  to  walk  down  a  whole  street  before  he  comes  to  a  house 
where  he  is  wanted.  After  finishing  his  work  he  goes  tramp¬ 
ing  again  before  he  comes  to  the  right  place  once  more.  He 
is  busy  the  whole  day.  but  half  or  more  than  half  of  his  time 
is  wasted  in  hunting  for  work,  and  only  the  other  half  of  his 
time  and  work  is  spent  profitably.  And  yet  perhaps  beyond 
the  place  he  stopped  after  a  day's  work  was  a  house  which  had 


LECTURE  111— WAGE  SLAVERY'.  CAUSE  AND  CURE* 


117 


leeded  cleaning  very  badly,  and  which  has  to  wait  until  chance 
)rings  this  or  another  window  cleaner  that  way.  With  the 
oureau  system  the  houses  that  need  cleaning  will  have  only 
;o  send  a  card  or  a  telephone  call,  and  the  window  cleaner  in¬ 
stead  of  wasting  his  time  in  tramping  from  door  to  door  will 
•eceive  his  orders  from  the  bureau  and.  go  straight  to  the  work. 
He  will  do  more  work  with  less  expenditure  of  time  and  energy 
and  the  people  will  therefore  get  their  work  done  cheaper. 

139.  That  nobody  will  make  an  effort  to  find  work  for 
limself  is  no  objection  at  all :  nobody  ought  to  be  expected 
:o  do  it.  Time  and  energy  spent  in  doing  useless  work  is  fool- 
sh  waste ;  it  produce's  no  useful  results.  Every  sensible  man 
vill  try  to  invent  means  to  avoid  it.  What  are  the  “want  ads.” 
n  the  newspapers  for?  They  are  intended  to  minimize  the 
vaste  in  seeking  work,  and  as  far  as  they  go,  they  are  doing 
:heir  work  well,  but  they  are  far  from  sufficient  to  meet  the 
*equirements  of  a  complex  society  in  which  division  and  sub¬ 
division  of  labor  has  extended  to  every  department  of  work. 
[  do  not  mean  that  the  bureau  should  not  allow  anybody  to 

in  search  of  work  for  himself  if  he  chooses  to  do  it ;  every- 
Dody  will  be  free  to  do  it  then  as  he  does  now.  But  nobody 
would  care  to  do  it  because  it  is  a  foolish  waste  and  has  no 
:ompen'Sating  advantage.  We  might  as  well  have  argued  be¬ 
fore  the  streets  were  indicated  by  name  plates  that  such  an  ar¬ 
rangement  should  not  be  introduced  for  the  people  would  no 
onger  run  up  and  down  streets  and  ask  every  person  for  name 
Di  the  street,  but  would  depend  upon  the  plates  for  informa¬ 
tion. 

140.  Hunting  for  work  is  undesirable  in  every  way ;  apart 
Prom  the  economic  waste  of  time  and  energy  in  search  of  work, 
apart  from  economic  loss  due  to  unemployment  of  productive 
power  for  want  of  work,  the  effort  of  searching  for  work  has 
a  highly  demoralizing  effect.  A  man  who  can  not  get  work 
after  the  first  few  attempts  is  at  first  discouraged,  then  dis¬ 
heartened,  then  follows  a  loss  of  self  respect.  He  begs  for 
work  almost  as  if  he  were  begging  for  food ;  at  this  stage  is  a 
parting  of  ways,  if  bold  and  unscrupulous  he  becomes  a  crim¬ 
inal,  if  a  coward  he  becomes  a  loafer,  if  neither  he  becomes  a 
sort  of  cross  between  a  loafer  and  a  criminal ;  he  borrows  with¬ 
out  definite  intention  of  repayment  and  has  not  even  the  sense 


118 


THE  UNEMPLOYMENT  PROBLEM. 


of  gratitude  which  a  beggar  might  feel  for  what  he  receives  as 
charity;  he  becomes  a  parasite,  a  shark,  a  faker,  whatever  he 
can  invent  safe  enough  and  yet  dishonest  enough  to  make 
him  a  criminal  from  the  moral  but  not  from  the  legal  point 
of  view.  Or  unable  to  bear  repeated  disappointments  he  seeks 
solace  in  drink,  keeps  in  low,  demoralizing  company.  If  he 
gets  work  at  this  stage,  he  is  generally  so  far  demoralized  as  to 
be  unable  to  keep  it.  If  on  the  contrary  he  chances  to  get 
work  at  the  very  start  or  soon  afterwards,  he  generally  gets 
puffed  with  a  false  sense  of  exceptional  ability  to  which  he 
attributes  his  success.  He  arrogates  an  attitude  of  contempt 
towards  his  less  fortunate  rivals  whom  he  regards  unworthy  of 
success  and  deserving  the  calamity  that  follows  as  a  just  re¬ 
ward  for  their  incomptency.  The  victims  of  failure  are  dis¬ 
heartened,  the  victims  of  success  become  heartless.  Who  are 
the  greedy  capitalists?  They  are  merely  the  victims  of  suc¬ 
cess  in  this  struggle  for  work.  Par  from  being  a  disadvantage 
I  should  think  that  the  end  of  individual  effort  to  find  and 
secure  work, — -the  end  of  struggle  for  work,  will  be  a  great 
moral  and  economic  advantage,  and  this  alone  even  if  there 
were  no  other  advantage,  should  be  sufficient  to  justify  the 
formation  of  the  Guaranteed  Employment  Bureau. 

141.  Unemployment  together  with  individual  responsi¬ 
bility  for  work,  lends  itself  as  an  excellent  tool  in  the  hands  of 
business  sharks  for  purposes  of  extortion  and  demoralization. 
I  have  read  of  some  employment  bureaus  that  have  their  of¬ 
fices  in  league  with  saloons.  I  have  also  read  that  in  some  of 
the  states  the  practice  is  being  discontinued  by  law.  It  is 
a  good  thing  for  law  to  prevent  such  demoralizing  practices  if 
it  can,  but  I  fail  to  see  how  a  law  can  prevent  secret  touts  em¬ 
ployed  by  saloons  to  bring  unemployed  men  with  promises 
to  help  them.  These  touts  are  always  on  the  lookout  for  men 
out  of  work ;  they  offer  their  help  by  way  of  introduction  to 
some  person  whom  they  expect  to  meet  at  the  saloon.  The 
rest  of  the  story  is  easily  conjectured  and  need  not  be  nar¬ 
rated  in  details.  The  conclusion  in  most  cases  is  the  acquire¬ 
ment  of  drinking  habit,  with  or  without  an  employment.  If 
the  incompetent  alone  were  unemployed,  it  would  be  b?d 
enough  ;  if  competent  men  were  out  of  work  for  a  time,  it  would 
still  be  tolerable,  but  unemployment  degenerates  competent 


LECTURE  111— WAGE  SLAVERY;  CAUSE  AND  CURE* 


119 


men  and  makes  them  incompetent,  not  simply  by  want  of  use 
and  exercise,  but  by  setting  on  foot  certain  demoralizing  pow¬ 
ers,  who  themselves  are  also  victims  of  unemployment. 
Economic  loss  due  to  unemployment  is  threefold,  firstly  due 
to  wealth  producing  power  compelled  to  remain  idle ;  secondly 
due  to  wealth  producing  power  destroyed  by  degeneration, 
and  thirdly  due  to  wealth  producing  transformed  into  wealth 
destroying  power,  as  the  only  means  of  escape,  by  men  of 
heads  without  hearts,  who  create  and  let  loose  powers  of  de¬ 
struction  in  order  to  escape  unemployment  for  themselves. 
On  the  other  hand  there  is  absolutely  no  advantage,  moral  or 
economic,  in  our  present  system  of  each  man  trying  to  find 
work  for  himself ;  so  long  as  he  does  the  work  when  he  gets 
it,  it  makes  no  difference  how  he  gets  it,  either  by  his  own  ef¬ 
fort  or  with  the  help  of  a  bureau.  In  fact  it  makes  a  little  dif¬ 
ference  the  other  way:  A  man  would  prefer  to  work  a  whole 
day  without  a  meal  if  circumstances  require  it,  but  spending  a 
day  in  search  of  work  without  any  definite  prospect  in  future 
and  with  a  memory  of  disappointments  in  the  past  is  positively 
hateful  to  every  worker.  The  Guaranteed  Employment  Bu¬ 
reau  will  put  an  end  to  all  these  evils  at  one  sweep. 

142.  Another  objection  to  the  Guaranteed  Emplovment 
Scheme  is  that  it  will  encourage  extravagant  habits.  People 
will  cease  to  be  frun?l  and  soend  as  fast  as  they  earn  without 
trying  to  save  anything.  If  by  extravagance  is  meant  indis¬ 
creet  expenditure  it  is  not  a  very  serious  question  at  all,  and 
besides  a  general  education,  there  is  no  need  to  make  any 
•provision.  Such  extravagance  carries  its  own  penalty  which 
is  just  sufficient  for  the  purpose.  If  a  man  spends  a  dollar 
today  attending  the  theater,  he  will  have  a  dollar  less  to¬ 
morrow  and  will  have  to  forego  some  comfort  or  necessity.  A 
little  discomfort  of  this  kind  will  not  do  him  much  harm,  but 
it  will  be  just  enough  to  teach  him  to  be  careful  and  balance 
'his  present  desires  against  his  future  desires  and  choose  ac¬ 
cordingly.  But  any  system  that  throws  all  the  weight  in  favor 
of  the  future  and  forbids  all  expenditure  except  what  is  ab¬ 
solutely  necessary  to  keep  body  and  soul  together  is  not  a 
desirable  system.  The  objection  that  people  will  be  extravag¬ 
ant,  if  that  is  meant  that  they  will  no  longer  be  miserly,  is 
no  objection  at  all;  we  have  here  once  more  one  of  the  merits 


120 


Tim  UNEMPLOYMENT  PROBLEM. 


of  the  scheme  presented  in  form  of  an  objection.  Economy 
is  not  a  virtue  by  itself,  it  is  a  virtue  in  so  far  as  it  serves  to 
avert  a  greater  evil  ;  when  there  is  no  evil  to  be  averted,  it  is 
no  longer  a  virtue.  In  a  malerious  district  every  person  has 
to  keep  a  sufficient  stock  of  quinine  and  laxatives.  What 
would  you  think  of  a  scheme  of  sanitary  reform  opposed  on 
the  ground  that,  with  improved  sanitary  conditions  there  will 
be  no  maleria,  and  people  will  no  longer  be  careful  enough  to 
keep  a  stock  of  quinine.  The  most  important  object  we  have 
in  trying  to  save,  is  to  provide  for  future  need,  if  the  future 
need  is  better  provided  for,  by  the  scheme  I  have  suggested, 
there  is  no  reason  why  anybody  ought  to  suffer  privation  when 
he  has  means  wherewith  to  live  a  comfortable  life.  Why 
should  a  man  starve  himself  on  half  meals,  live  in  cold  rooms 
ir>  winter,  and  go  about  in  a  seedy  hat  or  patched  boots,  when 
he  has  money  enough  to  pay  for  a  full  meal,  a  fire,  or  for  buy¬ 
ing  a  new  hat  and  boots?  If  he  behaves  like  this  today  it  is 
because  he  has  no  guarantee  of  earning  anything  tomorrow ;  he 
prefers  to  live  on  half  a  meal  today  in  order  to  avoid  a  pos¬ 
sible  no-meal  tomorrow.  He  only  chooses  the  lesser  evil. 
Economy  in  this  sense  is  not  a  virtue ;  it  is  only  a  lesser  evil. 
I  have  called  it  "a  lesser  evil”  because  from  the  individual’s 
point  of  view  it  is  the  lesser  evil ;  but  from  the  social  point  of 
view  it  is  really  the  greater  evil  because  it  keeps  other  people 
out  of  work,  and  that  it  perpetuates  itself.  Every  man  who 
tries  to  live  on  half  a  meal  keeps  the  farmer,  the  miller,  the 
baker,  and  the  carrier  out  of  work  to  that  extent.  I  do  not 
blame  the  poor  half  starved  wage  earner  for  his  economy:  He 
is  acting  under  pressure  of  necessity,  but  I  blame  our  social 
system  which  creates  the  necessity  and  I  blame  the  leaders 
of  society  who  insist  on  perpetuating  it  in  the  name  of  virtue. 

143.  But  the  poor  man  practicing  economy  is  not  the 
only  sinner  in  this  respect.  The  rich  do  the  same  thing.  If 
the  poor  man  stints  himself  of  bread,  the  rich  stints  him¬ 
self  of  automobiles.  The  manager  of  a  factory  who  gets 
$1,000  a  week  is  content  to  spend  only  $200  and  keeps  away 
$800  as  savings  for  future  use.  A  rich  man  who  would  have 
a  dozen  automobiles  and  does  not ;  who  would  buy  a  string 
of  pearls  for  his  wife  and  does  not ;  who  would  build  a  pala¬ 
tial  house  for  his  monkey  and  does  not.  does  on  a  large  scale 


LECTURE  III— WAGE  SLAVERY :  CAUSE  AND  CURE* 


121 


what  the  poor  does  on  a  small  scale,  viz.,  to  keep  a  large  num¬ 
ber  of  willing  workmen  out  of  work*  I  do  not  blame  the  rich 
man  any  more  than  I  could  blame  the  poor.  He  too  is  act¬ 
ing  under  pressure  of  necessity  ;  with  a  guaranteed  income,  he 
too  would  spend  as  fast  as  he  earned  and  there  would  be  no 
such  thing  as  manufactured  unemployment. 

144.  At  this  point  I  must  digress  a  little  to  criticize  the 
unreasonable  attitude  of  the  15church  on  this  question.  It  at¬ 
tributes  the  economic  difficulties  of  modern  civilization  to  the 
modern  spirit  of  extravagance  and  preaches  a  simple  life  as  a 
remedy.  I  can  understand  Jesus  Christ  preaching  simple  life 
and  denouncing  extravagance.  When  he  preached,  there  was 
no  science  of  economy  and  no  unemployment  problem.  He 
could  regard  the  subject  from  the  moral  point  of  view  alone, 
and  from  the  moral  point  of  view  he  was  certainly  right.  ]  f 
the  church  had  preached  simplicity  as  a  moral  discipline,  and 
denounced  extravagance  as  a  moral  weakness  and  Stopped 
there,  I  should  have  nothing  to  say  against  it;  but  when  they 
preach  simple  life  as  a  remedy  for  the  modern  economic  dis¬ 
ease,  they  are  committing  one  of  the  greatest  blunders  that 
demands  immediate  correction.  Every  act  of  extravagance  is 
work  and  wages  to  somebody ;  every  act  of  self-denial  is  unem¬ 
ployment  to  somebody.  From  the  economic  point  of  view  ex¬ 
travagance  is  extremely  useful  in  relieving  the  unemployed ;  if 
is  a  partial  solution  of  the  unemployment  problem.  Any  re-* 
turn  to  simple  life  would  be  a  serious  calamity, 

145.  “But,”  says  the  representative  of  the  church,  “should 
we  preach  to  the  people  to  ignore  the  claims  of  morality  and 
to  practice  extravagance  for  the  Sake  of  its  economic  bless¬ 
ings?  Or  should  we  preach  both  extravagance  for  the  sake 
of  economics  and  self  denial  for  the  sake  of  moral  discipline; 
Why  should  economy1  and  morality  be  at  war  with  one  anoth¬ 
er?  True  economy  ought  to  be  in  conformity  with  the  true 
morality.  The  third  question  1  will  answer  later,  but  as  tc: 

15.  The  following  i-s  a  sample  of  church-logic  on  the  economics  o 
modern  society  and  its  relation  to  the  labor  problem:  “The  com 
troversy  at  Lawrence  is  but  a  manifestation  of  the  National  dis¬ 
ease  of  extravagance  and  selfishness.  Our  people  have  forgotten  -sim 
plicity  and  are  living  at  a  reckless  rate.”— Kev.  Dr.  J.  DeNorrnandy 
Roxberry. 


122 


THE  UNEMPLOYMENT  PROBLEM. 


the  first  two,  I  confess  my  inability  to  answer  them ;  I  only 
plead  that  I  am  not  responsible  for  an  answer.  You  placed 
yourselves  in  an  impossible  position ;  you  adopted  an  im¬ 
possible  combination  of  two  incompatible  ideals  as  the  basis 
of  your  social  structure  and  you  insist  on  maintaining  that  ab¬ 
surdity;  an  absurd  hypothesis  must  always  lead  to  absurd 
conclusions,  and  you  must  now  be  prepared  to  meet  the  situa¬ 
tion  in  which  you  find  yourself.  It  is  a  well  known  law  of 
mathematics  that  a  surd  introduced  in  an  equation  can¬ 
not  be  got  rid  of  by  any  amount  of  transposition.  You  can 
shift  it  from  one  side  to  another  or  from  the  numerator  to  the 
denominator  and  vice  versa,  but  you  cannot  get  it  out  of  the 
equation  and  so  long  as  it  remains,  the  equation  cannot  be 
solved.  The  only  way  to  solve  the  equation  is  to  square  the 
surd,  nothing  else  can  be  used  as  a  substitute.  In  our  social 
problem  we  have  introduced  a  surd.  The  injustice  of  receiving 
employment  without  giving  in  return,  is  the  surd ;  nothing  but 
a  fair  and  square  justice  can  remove  the  surd.  If  you  try  to 
return  employment  in  any  other  way  you  have  to  be  extravag¬ 
ant.  If  you  cease  to  be  extravagant,  you  create  so  much  more 
unemployment.  If  you  obey  the  moral  law,  you  violate  the 
economic  law,  if  you  obey  the  economic  law.  you  violate  the 
moral  law.  To  preach  simple  life  and  practice  extravagance 
is  about  the  only  thing  you  can  do  now,  and  if  appearances 
could  be  trusted,  you  have  made  a  glorious  progress  along 
this  line. 

146.  “Why  should  morality  and  economics  be  at  war?” 
was  one  of  your  questions.  True  morality  and  true  economics 
ought  not  to  be  irreconcilable  under  normal  conditions,  both 
ought  to  dictate  the  same  policy,  but  we  are  not  living  under 
normal  conditions.  In  normal  state  of  health  the  taste  of  a 
person  may  be  relied  upon  in  determining  what  is  good  for  his 
health,  but  a  morbid  taste  developed  under  abnormal  condi¬ 
tions  would  be  utterly  irreconcilable  with  the  requirements  of 
health.  In  adopting  thrift  as  an  ideal  we  have  introduced  ab¬ 
normal  conditions.  Receiving  employment  without  eiving 
it  in  return,  is  contrary  to  the  laws  of  moralitv,  creatine  un¬ 
employment  as  the  method  of  preventing  it  is  contrary  to 
the  laws  of  economics.  We  have  allowed  the  framework  of 
our  social  structure  to  be  warped  on  both  the  moral  and 


LECTURE  HI— WAGE  SLAVERY;  CAUSE  AND  CURE. 


123 


economic  sides  and  nothing  but  a  squaring  up  of  the  distortion 
can  help  us  out  of  the  dilemna. 

147.  One  of  the  bitterest  cries  against  modern  economic 
conditions  is  the  ery  against  the  unequal  distribution  of 
wealth.  It  is  the  inevitable  result  of  the  iron  law  of  need  and 
counter  need,— popularly  known  by  the  misleading  name,  the 
law  of  demand  and  supply.  It  is  not  because  the  capitalist  is 
greedy,  or  heartless  or  unscrupulous.  Even  if  the  capitalists 
were  to  take  an  oath  to  be  clean  capitalists,  and  to  stand  by  it. 
taking  nothing  in  excess  of  what  is  conceded  as  “just  profit, ,r 
even  then  the  unequal  distribution  of  wealth  could  not  be 
averted.  The  instinct  of  extravagance  serves  to  a  slight  ex¬ 
tent  to  counteract  this  inequality.  The  extravagant  capital¬ 
ist  robs  himself  of  a  part  of  his  opportunity  centered  in  his 
wealth,  and  gives  it  to  somebody  else.  But  it  is  often  said  that 
the  capitalist  robs  his  workers  in  order  to  be  able  to  spend  his 
large  profits  in  extravagance  ;  he  ought  not  to  spend  the  wealth 
so  obtained  in  dissipation.  In  answering  this  objection  I  must 
note  that  we  are  now  discussing  the  question  from  a  strictly 
economic  point  of  view  and  any  reference  to  the  moral  aspect 
of  dissipation  would  be  out  of  place.  Suppose  a  millionaire 
robs  his  workmen  of  half  their  wages  and  spends  them  in 
building  a  palatial  kennel  for  his  dog.  He  robs  half  of  a  loaf 
from  his  weavers  and  gives  it  to  his  mason.  But  for  this  act 
the  weaver  would  have  been  a  trifle  better  off  and  the  mason 
would  have  starved  to  death  for  want  of  employment.  The 
extravagant  capitalist  eciualizes  the  distribution  of  wealth  be¬ 
tween  the  weaver  and  the  mason.  In  other  words  extravag¬ 
ance  is  not  the  cause  of  econoic  evil,  on  the  contrary  it  is  a 
partial  remedy. 

148.  Now  to  return  to  the  question  regarding  savings: 
Saving  is  not  a  virtue  by  itself,  it  is  only  a  remedy  against 
a  greater  evil.  To  oppose  a  reform  intended  to  put  an  end 
to  that  evil  on  the  ground  that  the  remedy  will  no  longer 
be  needed  is  either  wicked  or  foolish.  Even  as  a  remedy  it  is 
absolutelv  worthless.  It  creates  more  harm  than  it  cures. 
Every  dollar  saved  keeps  somebody  out  of  employment,  who? 
in  turn  is  compelled  to  keep  somebody  else  out  of  work.  Every 
dollar  that  is  saved  is  the  first  link  of  a  long  chain  of  unem¬ 
ployment,  and  the  whole  society, — including  even  the  capital- 


124 


the  unemployment  problem. 


ist, — 4s  enslaved  by  fetters  of  its  own  making.  Now  and  then 
an  extravagant  capitalist  ventures  to  break  a  link  of  the  chain 
by  giving  employment  to  others  without  any  real  need— just 
for  the  sake  of  some  real  or  fancied  pleasure,  and  the  voice 
of  indignant  society  denounces  him  as  a  malfactor.  Citizens 
of  the  United  States  are  you  awake?  Unemployment  is  the 
sole  cause  of  wage  slavery  and  misery  of  the  wage  slave.  The 
capitalist  has  not  created  wage  slavery.  On  the  contrary  he 
does  something  to  equalize  wealth  and  to  mitigate  the  rigor  of 
the  slavery.  If  he  does  not  do  more  than  what  he  is  doing  at 
present,  it  is  because  he  is  himself  a  wage  slave  of  others  and 
a  victim  of  unemployment.  There  is  only  one  cause  of  wage 
slavery :  viz.,  unemployment  actual  and  prospective ;  there  is 
only  one  cure  for  wage  slavery,  viz.,  Guaranteed  Employment* 
There  is  no  other  way  out  of  this  hell  on  earth. 

UNEMPLOYMENT  MUST  BE  DESTROYED. 


Capitalism  and  the  Wage  System 


“Be  content  with  your  wages.” — Luke  111:14. 

149.  Thus  far  we  have  discussed  the  question  from  the 
workers’  point  of  view  only.  Where  does  the  capitalist  come 
in?  Will  he  be  friend  or  foe?  Will  he  help  the  movement  or 
will  he  throw  obstruction  in  the  way?  One  thing  is  certain, 
that  either  as  a  friend  or  foe  he  represents  a  power  that  can¬ 
not  be  overlooked.  We  cannot  afford  to  ignore  the  capitalist. 
This  brings  us  face  to  face  with  Socialist  philosophy.  It 
would  be  more  correct  to  say,  'Anti-capitalistic  Philosophy/ 
for  the  views  to  be  discussed  in  this  and  in  some  of  the  follow¬ 
ing  lectures,  are  held  by  the  followers  of  several  other  schools 
of  sociology  besides  Socialism.  But  whatever  their  differ¬ 
ences  in  other  respects,  they  all  agree  in  their  criticism  of  capi¬ 
talism.  Any  one  of  these  schools  may  therefore  be  taken  as 
lepresentative  of  all  others.  I  have  preferred  Socialism,  not 
merely  because  it  is  numerically  the  most  important,  but  also 
because  it  has  a  copious  literature,  and  an  extensive  organiza¬ 
tion  for  propagation  of  that  literature.  It  is  therefore  neces¬ 
sary  to  define  the  term  "Socialism,”  so  as  to  include  all  these 
systems  of  philosophy,  without  doing  violence  to  any  of  the 
current  definitions.  Socialism,  in  its  broadest  sense,  is  an 
ideal  state  of  society,  where  each  worker  will  receive  the 
full  produce  of  his  labor;  or  when  the  production  is  complex, 
depending  upon  the  combined  labor  of  several  persons,  each 
person  will  receive  his  full  share  in  value,  of  the  total  joint 
produce,  his  share  being  measured  bv  the  amount  of  labor  he 
was  required  to  contribute.  A  Socialist  according  to  this  con¬ 
ception,  is  a  person  who  avows  this  ideal,  and  strives  to  bring 
about  a  state  of  societv  in  which  this  ideal  will  be  realized,  so 
that  every  worker  will  receive  the  full  produce  of  his  toil,  or 
its;  equivalent  in  value.  The  term  "Socialism,”  when  used  in 
the  sense  of  a  philosophic  system,  means  a  system  of  social 
and  economic  philosophy,  with  "full  produce  to  workers”  as 


THE  UNEMPLOYMENT  PROBLEM. 


126 

its  objective.  The  ^‘Socialist”  in  the  narrower  sense,  stands 
for  public  ownership  and  democratic  control  of  centralized 
means  of  production,  as  a  method  of  reaching  that  ideal.  In  a 
still  narrower  sense,  a  Socialist  is  a  member  of  one  of  the 
political  parties  in  any  country,  such  as  the  Socialist  party,  or 
the  Socialist  Labor  party,  in  the  United  States.  None  of 
these  definitions  include  “Scientific  Socialism/’  for  the  simple 
reason  that  scientific  Socialism  is  not  any  kind  of  Socialism  at 
all.  Scientific  Socialism  is  an  analytical  study  of  social  evolu¬ 
tion.  It  is  a  pure  theory,  and  is  not  tied  down  to  any  particular 
ideal. 

150.  As  I  said  before,  capitalism  is  a  power, — an  immense 
power.  In  popular  Socialism  it  is  regarded  as  a  power  of  evil, 
and  an  unmitigated  evil,  or  when  discussed  by  Socialists  who 
are  leniently  inclined,  it  is  at  best  regarded  as  a  necessary  evil. 
Lvery  Socialist  argument  begins  with  an  indictment  of  capi¬ 
talism,  and  the  overthrow  of  capitalism  is  then  a  necessary 
and  legitimate  conclusion.  This  so-rt  of  reasoning  is  wholly 
unscientific.  No  p*ood  has  ever  been  done  by  indictments  and 
anathemas.  We  know  electricity  is  a  great  power  and  in  its 
natural  state  is  almost  always  a  power  of  evil.  The 

same  is  true  of  other  natural  forces.  But  much  as 

we  may  lament  the  havoc  caused  by  lightning, 

floods  and  cyclones  we  never  indict  them ;  we  study 
them.  We  try  to  unravel  the  mystery  of  their  laws  of 
operation,  and  when  we  discover  the  laws  we  do  not  rebel 
against  them  or  try  to  overthrow  the  powers,  or  to  violate  the 
laws  of  nature,  we  obey  the  laws  and  adapt  ourselves  to  them, 
so  that  by  obeying  nature  we  command  and  control  her.  Our 
duty  then,  is  not  to  indict  capitalism,  but  to  study  it.  A 
scientist  does  not  indict  cholera.  He  studies  it  under  a  micro¬ 
scope  and  tries  to  discover  what  is  not  visible  to  the  unaided 
eye.  He  does  not  indict  poison,  he  analysis  it  and  tries  to 
understand  its  workings  with  an  ultimate  view  of  eliminat¬ 
ing  its  evils  by  devising  a  means  to  make  it  leave  the  system. 

1.  “The  purpose  of  Socialism  is  to  give  to  the  workers  all  they 
produce  ....  Socialists  agree  that  the  heart  and  soul  of  their  philoso¬ 
phy  lies  in  public  ownership  under  democratic  srovernment,  of  the 
means  of  life:  .  .  .  Public  ownershio  is  the  rock  upon  which  it  is 
determined  to  stand  or  fall.” — Allan  Benson:  Truth  About  Socialism, 
pages  18-19. 


I,ECTURE  IV -CAPITALISM  AND  THE  WAGE  SYSTEM. 


127 


151.  Among  all  the  anti-capitalists,  including  the  So¬ 
cialists,  the  indictment  of  capitalism  seems  to  have  been  the 
most  favorite  method  from  time  immemorial.  The  Old  Testa¬ 
ment  condemned  interest,  and  the  New  Testament  condemned 
profits,  but  with  one  solitary  exception  no  Socialist  writer 
from  Isaiah  to  Moses  Hilkowitz  has  ever  felt  the  need  to  study 
capitalism,  to  analyze  the  process  and  conditions  of  capi¬ 
talistic  production.  Capitalism  is  irobbery,  capitalism  shall  be 
Overthrown ;  this  is  the  law  and  the  prophets.  The  only  ex¬ 
ception  I  referred  to  is  the  illustrious  Karl  Marx.  His  most 
important  work  is  not  a  glowing  picture  of  the  Socialist  state, 
but  a  cold,  mathematically  precise  study  of  capitalism.  I  do 
not  want  you  to  carry  the  impression  that  I  follow  Marx 
through  thick  and  thin  and  that  I  am  thoroughly  in  agreement 
with  all  his  views.  I  am  not.  I  do  not  accept  the  Marxian 
conception  of  value,  nor  do  I  admit  his  theory  of  the  class 
struggle.  But  the  most  serious  of  my  complaints  against 
Marx  is  that  he  neglected  the  relation  of  the  unemployment 
problem  to  capitalism.  He  had  the  ability  and  the  opportunity 

2.  The  following  extracts  are  collected  from  one  single  issue  of  a 
Socialist  paper.  They  illustrate  the  intensity  of  Socialist  sentiment 
against  capitalism.  Who  could  expect  an  unprejudiced  and  scientific 
study  of  capitalism  from  persons  in  such  an  unscientific  mood? 

a.  One  touch  of  Capitalism  makes  the  whole  world  shudder. 

b.  Capitalist  reformers  would  regulate  wage  slavery  while  Social¬ 
ists  would  abolish  it. 

c.  Capitalist  charity  is  like  the  vampire  bat  that  draws  the  blood 
o i  its  victim  while  it  fans  him. 

d.  Capitalism  isn’t  a  system — it’s  a  bloody  mess. 

e.  Clip  the  claws  of  the  crafty  capitalists  by  voting  for  Benson 
and  Kirkpatrick. 

f.  Capitalism  is  a  slaughter  house  in  which  the  workers  are  the 
sheep. 

g.  Capitalism  is  the  worker’s  greatest  and  only  enemy  and  it 
exists  only  through  his  ignorance. 

h.  Capitalism  is  economic  cannibalism. 

i.  Every  dollar  made  in  profits  adds  to  the  world’s  poverty  ano 
misery. 

j.  The  art  of  making  some  men  rich  also  includes  the  art  of 
making  other  men  poor. 

k.  Capitalism  has  no  flag,  but  if  it  had  it  would  have  to  be  black 
in  order  to  be  appropriate. 

l.  Socialism  demands  much  because  the  world  is  in  need  of  much 
of  which  capitalism  has  deprived  it. 


128 


THE  UNEMPLOYMENT  PROBLEM. 


to  study  the  problem  and  he  threw  it  3away.  At  one  moment  he 
had  it  almost  between  his  thumb  and  4forefinger  and  let  it  go. 
The  Socialists  are  loyal  to  Marx  at  least  in  this,  if  in  nothing 
else,  that  like  him  they  neglect  the  unemployment  problem. 
But  the  purpose  of  this  lecture  is  a  study  of  capitalism,  not  a 
criticism  of  Socialism,  much  less  of  the  Socialists. 

152.  What  is  capitalism.  The  mere  possession  of  money 
is  not  capitalism,  nor  does  it  consist  of  purchase  and  owner¬ 
ship  of  things  that  can  be  used  as  implements  of  production. 
The  essential  feature  of  capitalism  is  profit,  or  rather  the 
profit  system.  A  capitalist  may  not  always  make  profit,  but 
if  he  expects  or  intends  to  make  profit  when  he  undertakes  a 
work,  his  functioning  in  this  capacity  is  sufficient  to  make  him 
a  capitalist.  There  are  three  leading  types  of  capitalists ;  the 
money-lending  capitalist,  the  merchant-capitalist  and  the 
manufacturing-capitalist.  In  the  first  case  the  capitalist  lends 
money  with  or  without  security  as  he  sees  fit,  and  takes  inter¬ 
est  for  the  money  loaned.  This  is  the  oldest  type  of  capitalism 
and  from  which  the  others  have  been  sderived  by  modification. 

3.  “The  question  why  this  free  laborer  (i.  e.,  the  unemployed') 
confronts  him  (the  capitalist)  in  the  market,  has  no  interest  for  the 
owner  of  money;  ....  and  for  the  present  it  interests  us  just  as  little. ” 
— Marx,  Capital,  Vol.  I,  p.  188. 

From  the  words  “for  the  present”  it  would  seem  that  Marx  in¬ 
tended  to  take  up  this  question  later.  Iror  some  reason  he  never  took 
up  that  question  again.  As  a  tribute  to  his  analytical  genius,  and  spirit 
of  fair-mindedness  it  is  only  reasonable  to  assume  that  he  forgot. 

4.  Se-e  Lecture  I  Para.  15,  Note  14;  Para.  52,  Note  31. 

5..  According  to  Marx,  industrial  capitalism  is  the  fundamental, 
and  the  other  two  forms  are  derived  types: 

“In  the  course  of  our  investigation  we  shall  find  that  both 
merchant’s  capital  and  interest  bearing  capital  are  derivative 
forms,  and  at  the  same  time  it  will  become  clear  why  these 
two  forms  appear  in  the  course  of  history  before  the  modern 
standard  form  of  capital.” — Marx,  Capital,  Vol.  I,  page  183. 

How  Marx  happened  to  fall  into  this  error  I  am  unable  to  ex¬ 
plain.  The  fact  that  the  other  forms  were  historically  prior  to  in¬ 
dustrial  capitalism  ought  to  have  put  him  on  his  guard,  for  a  derived 
form  must  always  follow  the  fundamental  form,  in  time.  It  is  possible, 
however,  that  by  “derived  form”  he  only  meant  economically  depend¬ 
ent,  in  which  case  the  error  is  reduced  to  merely  a  wrong  choice  of 
terms.  In  capital,  Vol.  II,  page  63,  he  proves  that  industrial  capi¬ 
talism  is  the  predominating  type,  and  the  other  two  are  now  subor¬ 
dinate  to  and  dependent  on  it.  which  is  certainly  true,  but  this,  does 
riot  mean  that  they  are  “derived  forms.” 


LECTURE;  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


129 


Suppose  a  money  lender  lends  money  to  a  hatter  who  has  made 
a  hundred  hats,  but  who  has  not  been  able  to  sell  them ;  the 
money  lender  lends  the  money  and  takes  the  hats  in  return  as 
security  against  the  time  that  the  hats  will  be  sold.  After  the 
sale  of  the  hats  the  money  lender  recovers  the  money  lent  with 
interest.  Now  suppose  that  the  money  lender  agrees  to  sell 
the  hats  and  take  in  return  for  this  service  the  difference  be¬ 
tween  the  money  advanced  and  the  price  recovered :  in  this 
event  you  have  the  transformation  of  the  money  lender  into 
the  hat  merchant.  The  term  “money  advanced”  now  super¬ 
sedes  the  former  term  “money  loaned”  and  the  interest  which 
is  now  indefinite  in  amount,  together  with  the  remuneration  of 
the  merchant  for  his  task  of  selling,  is.  called  “profit.”  The 
hats  are  said  to  be  “bought”  in  accordance  with  this  operation. 
Now  if  the  merchant  were  to  take  another  step  forward  he 
would  buy  the  hats  before  they  were  finished,  buying  them 
step  by  step  as  they  are  being  produced,  that  is  to  say,  in  the 
process  of  manufacture.  In  this  capacity  he  is  called  a  “manu¬ 
facturing  capitalist.”  The  money  advanced  is  now  said  to  be 
“invested.”  The  money  lender  is  the  fundamental  type  of  capi¬ 
talist;  merchant  capitalist  and  industrial  capitalist  being  the 
derived  forms. 

153.  In  a  modern  civilized  society  in  which  capitalism  is 
the  prevailing  mode  of  production,  the  capitalist  performs  a 
two-fold  function;  firstly,  he  performs  the  individual  function 
of  bridging  the  time-gap,  thus  rendering  a  valuable  service  to 
the  individual,  and  secondly,  he  performs  the  social  function 
of  taking  from  the  workers  a  part  of  their  produce  and  of  con¬ 
verting  it  into  productive  capital  for  future  use;  in  this  manner 
he  renders  an  extremely  important  service  to  society.  The 
capitalist  often  performs,  or  rather  is  supposed  to  perform  a 
tMrd  function,  viz.,  supervision  of  industry,  but  this  is  a  mis¬ 
take.  Supervision  of  industry  is  a  labor  function,  and  even 
when  performed  by  a  capitalist  is  still  a  labor  function. 
Imagine  a  diamond  cutter  rich  enough  to  own  his  own 
diamonds  and  the  machinery  necessary  to  cut  the  diamonds ; 

6.  He  (Capitalist,  as  director  and  superintendent)  creates  surplus 
value,  not  because  he  performs  the  work  of  a  capitalist,  but  because  he 
also  works,  aside  from  his  capacity  as  a  capitalist. — Marx,  Capital,  Vol. 
Ill,  page  450. 


130 


THE  UNEMPLOYMENT  PROBLEM. 


he  would  now  be  a  capitalist  and  a  laborer  combined,  but 
though  he  worked  along  side  of  his  hired  workers,  we  would 
not  say  that  cutting  diamonds  was  therefore  a  function  of  the 
capitalist;  we  should  rather  say,  that  this  particular  capitalist 
was  also  a  laborer;  cutting  the  diamonds  is  always  a  labor 
function,  even  when  it  is  done  by  a  capitalist — who  for  the  time 
should  be  regarded  as  a  laborer.  In  the  same  way,  a  capital¬ 
ist  who  keeps  his  own  account  books,  hires  his  help,  or  plans 
the  alterations  to  his  factory,  is  just  to  that  extent  a  laborer. 
The  proper  fundamental  functions  of  a  capitalist  are  two  and 
only  two,  viz.,  (1)  Bridging  of  time-gap,  and  (2)  appropria- 
t  on  of  surplus  value  for  re-investment.  There  are  also  some 
secondary  or  derived  functions  which  will  be  considered  later. 

154.  What  is  time-gap?  Every  individual  is  a  consumer 
before  he  is  a  producer;  he  must  consume  before  he  can  pro¬ 
duce.  You  must  put  coal  and  water  into  an  engine  before 
you  can  take  work  out  of  it.  You  have  to  switch  the  current 
into  a  lamp  or  a  fan  motor  before  it  can  give  out  light  or  a 
breeze.  A  man  is  at  best  a  machine,  not  only  physically,  but 
intellectually,  as  well.  He  must  eat  food  from  his  birth  during 
the  course  of  many  years,  till  his  muscles  are  in  proper  condi¬ 
tion  to  produce  anything,  even  by  the  simplest  type  of  manual 
labor.  He  must  read  books  and  consume  the  intellectual  pro¬ 
duct  of  other  men  to  get  his  education,  before  he  can  turn  out 
any  intellectual  work  himself.  In  all  cases  he  must  consume 
before  he  produces.  Individually,  man  is  a  consumer  before 
he  is  a  producer.  This  is  the  law  of  Nature, — law  of  God,  if 
you  please. 

155.  Socially,  man  is  a  producer  before  he  is  a  consumer. 

There  are  men  who  are  recognized  as  consumers  first,  and 
some  men  who  may  not  be  producers  at  all,  but  society  re¬ 
gards  this  as  a  breach  of  law,  as  something  that  must  be 
averted  or  discontinued,  as  something  that  should  not  be  tol¬ 
erated,  much  less  encouraged.  Socially,  man  is  recognized  as 
a  producer  only.  To  the  producer  belongs  the  full  product  of 
his  toil:  That  is  our  social  ideal.  It  may  not  always  be  prac¬ 
ticed,  and  we  should  have  sense  enough  to  know  that  it  can¬ 
not  be  practiced, — but  I  will  waive  that  point  for  the  present ; 
nevertheless,  we  still  regard  that  as  our  social  ideal.  A  person 
who  openly  avows  this  ideal,  “to  the  producer  the  full  product 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM, 


131 


of  his  toil,”  and  endeavors  to  carry  it  to  its  logical  conclusion  is 
a  7Socialist.  Is  this  ideal  right  in  theory  and  practicable  in 
its  application  ? 

156.  Whether  the  ideal  be  right  or  wrong,  there  is  one 
thing  certain,  and  that  is,  that  it  is  an  impossible  ideal;  it 
cannot  be  followed  out  consistently  without  making  excep¬ 
tions  and  modifications  at  every  step.  If  the  produce  belongs 
to  the  producer,  then  obviously,  it  belongs  to  nobody  else, 
certainly  not  to  one  who  has  produced  nothing  whatever. 
Therefore,  a  person  who  has  not  produced,  he  has  no  right  to 
consume,  for  nothing  belongs  to  him.  If  a  man  has  not  pro¬ 
duced  neither  has  he  a  right  to  consume.  According  to  our 
social  standard,  man  must  produce  before  he  consumes.  This 
is  the  law  of  man. 

157.  Between  these  two  laws  there  is  a  hopeless  contra¬ 
diction  ;  it  is  impossible  to  reconcile  them,  and  one  of  the  laws 
must  be  violated.  When  the  laws  of  man  are  in  conflict  with 
the  laws  of  Nature,  the  laws  of  man  must  go  overboard.  Sex¬ 
ual  affinity  is  a  law  of  Nature.  Suppose  the  laws  of  man 
were  to  regard  such  affinity  as  wrong,  and  that  statutes  were 
enacted  to  prevent  all  sexual-intercourse,  or  that  the  marriage 
system  were  to  be  abolished  by  law,  what  would  be  the  result? 
The  world  would  go  on  undisturbed.  There  would  be  secret 

7.  As  stated  before,  the  word  Socialism  is  used  here  in  the  broad¬ 
est  sense,  as  will  be  seen  from  the  following  illustrations; 

a.  Under  Socialism,  the  whole  product  of  labor  is  to  be  dis¬ 
tributed  among  the  workers.  Thus  far  we  are  orthodox. — ‘Charles  E. 
Russell,  N.  Y.  Call,  June  18th,  1916. 

b.  “We  call  upon  our  citizenship,  ....  to  eliminate  the  injustices 
exposed  by  this  commission,  to  the  end  that  each  laborer  may  secure 
the  whole  product  of  his  labor.” — Page  156,  Report  of  the  Commis¬ 
sion  of  Industrial  Relations,  supplemental  statement  by  Frank  P. 
Walsh,  chairman. 

c.  Inasmuch  as  most  good  things  are  produced  by  labor,  it  fol¬ 

lows  that  all  such  things  of  right  belong  to  those  whose  labor  has  pro¬ 
duced  them . to  secure  to  each  laborer  the  whole  product  of  his 

labor,  or  as  nearly  as  possible,  is  a  worthy  subject  for  any  good  gov¬ 
ernment. — Abraham  Lincoln,  (quoted  by  Frank  P.  Walsh). 

d.  (Under  Anarchism)  with  the  incubus  of  privilege  removed, 
producers  would  retain  all  their  product/’ — John  Beverley  Robinson, 
Economics  of  Liberty,  page  106. 

e.  “Labor  is  entitled  to  all  it  produ  es.” — Joseph  J.  Ettor,  Indus¬ 
trial  Unionism. 


132 


THE  UNEMPLOYMENT  PROBLEM. 


marriages  or  open  violation  of  the  laws  regarding  sexual  mat¬ 
ters.  The  same  thing  happens  to  the  economic  law.  The  law 
of  Nature  requires  consumption  before  production.  The  laws 
of  man  demand  production  first,  the  laws  of  man  are  there¬ 
fore  violated,  for  man  could  not  live  at  all  without  violating 
such  laws.  If  everyone  who  had  not  first  produced  were 
denied  the  right  to  consume,  not  a  single  baby  in  the  world 
would  live  to  be  24  hours  old.  The  human  law  of  “production 
first”  has  to  be  violated  at  every  step. 

158.  And  so  it  is  violated  at  every  step ;  there  are  various 
ways  of  doing  it,  but  no  matter  what  the  method,  the  purpose 
is  always  the  same :  the  revolt  against  the  human  or  rather 
the  inhuman  law  of  “production  first.”  All  our  social  institu¬ 
tions  are  directed  towards  this  revolutionary  end,  viz.,  the 
overthrow  of  the  law  of  “production  first.”  The  oldest  institu¬ 
tion,  the  one  that  has  persisted  through  all  the  types  of  civil¬ 
ization  is  the  family.  Within  the  family,  the  rule  of  produc¬ 
tion  first,  and  also  the  underlying  principle  “to  the  producer 
belongs  the  full  product”  are  wholly  ignored ;  more  than  that, 
a  family  is  compelled  in  all  civilized  countries  to  suspend  this 
law  to  some  extent ;  a  man  who  does  not  support  his  wife  and 
children  will  be  compelled  to  support  them  by  law,  or  by  the 
force  of  public  opinion.  All  charitable  ‘institutions  (what¬ 
ever  their  name  or  form)  violate  this  law  and  are  respected 
for  this  act  of  violation.  A  church  that  would  refuse  admis¬ 
sion  unless  the  person  first  pays  the  admission  fee  will  scarce¬ 
ly  be  held  in  reverence.  But  neither  the  family  nor  the  church, 
nor  the  charitable  institutions  suffice  to  overthrow  the  law; 
the  law  still  prevails,  and  some  systematic  method  of  attack¬ 
ing  it  becomes  necessary.  Capitalism  is  one  method  directed 
towards  this  end ;  how  far  it  has  succeeded  in  performing  this 
function  is  the  question  for  our  present  study. 

159.  According  to  the  law  of  Nature,  man  must  consume 
before  he  can  produce.  Need  to  consume  comes  into  existence 
before  the  ability  to  produce.  According  to  the  inhuman 
and  unnatural  social  law,  the  right  to  consume  comes  into  ex¬ 
istence  after  his  produce,  therefore  the  need  to  consume  al¬ 
ways  comes  into  existence  before  the  right  to  consume.  The 
interval  of  time  between  the  need  to  consume  and  the  sub¬ 
sequent  right  to  consume  is  the  TIME-GAP.  This  time-gap 


LECTITRE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM, 


133 


may  be  short  or  long,  it  may  be  definite  or  indefinte,  but  in  all 
cases  it  is  urgent,  and  unless  it  is  bridged  in  some  way  the 
individual  will  suffer,  and  the  suffering  may  culminate 
in  death.  The  need  of  bridging  this  time-gap  is  there¬ 
fore  one  of  the  most  urgent  and  universal  of  human 
needs.  The  only  possible  way  to  bridge  the  time-gap 
for  any  individual  is  by  consuming  what  somebody  else  has 
produced,  but  since  according  to  the  social  law  no  person  has 
a  right  to  consume  the  produce  of  others,  he  can  only  con¬ 
sume  it  by  the  producer’s  consent.  In  the  family  this  consent 
is  given  by  the  older  members  through  love,  and  affection.  In 
charitable  institutions  it  is  given  by  the  donors  through  a 
sense  of  real  or  pretended  love  for  those  in  need.  But  there 
are  many  occasions  where  both  these  methods  fail ;  the  family 
and  the  charitable  institutions  are  both  unable  to  give  to  the 
full  extent  of  the  needs  of  the  individual.  Suppose,  for  ex¬ 
ample,  that  I  desire  to  start  my  career  as  a  dentist.  My  poor 
parents  might  be  able  to  give  me  food  and  clothing  during 
my  boyhood,  but  they  could  not  bear  the  expense  of  necessary 
college  education  much  less  can  they  bear  the  preliminary  ex¬ 
pense  of  starting  me  up  in  the  profession,  such  as  providing 
the  necessary  tools,  furniture  and  other  accessories,  and  yet 
unless  I  buy  these  first  I  could  not  produce  the  necessary 
service.  I  cannot  be  a  producer  first.  I  must  be  a  consumer 
to  a  large  extent  before  I  can  fill  the  first  tooth.  I  might  have 
the  necessary  ability  and  aptitude.  Perhaps  I  am  sufficiently 
gifted  by  Nature  to  become  the  ablest  and  most  successful 
dentist  in  the  nation.  I  would  perhaps  not  rise  above  the 
mediocre  but  whether  I  will  rise  above  or  fall  below  is  but  a 
matter  of  conjecture.  What  the  future  has  in  store  for  me,  this 
social  law  decrees,  I  shall  not  know  because  I  have  not  “pro¬ 
duced  first.” 

160.  Now  there  comes  upon  the  scene  the  capitalist  who 
loans  me  money.  He  helps  me  to  tide  over  the  time  till  I 
obtain  my  education,  tools  and  equipment.  In  course  of 
time,  1  produce  according  to  my  ability  and  return  the  loan. 
I  also  pay  an  extra  amount  as  interest  for  the  service  he  has 
rendered  to  me ;  he  has  bridged  the  time-gap.  The  question 
whether  the  interest  is  moderate  and  proportional  to  the  ser¬ 
vice  rendered,  or  excessive  and  out  of  all  proportion  to  the 


134 


THE  UNEMPLOYMENT  PROBLEM. 


service,  is  certainly  important,  but  it  cannot  be  discussed  at 
this  stage.  We  are  discussing  at  this  stage  only  the  nature  of 
the  service  and  not  the  amount  of  payment.  The  capitalist  has 
bridged  the  time-gap  and  rendered  a  valuable  service  to  me 
by  lending  me  the  money  before  I  could  produce  anything.  In 
other  words,  he  enables  me  to  consume  before  I  produce,  and 
he  does  it  in  defiance  of  the  social  law  of  production  first. 

161.  The  same  thing  may  be  said  of  the  other  forms  of 
capitalism.  A  merchant  who  buys  commodities  from  the  pro¬ 
ducer  is  only  bridging  the  time-gap.  Suppose  a  farmer  has 
produced  wheat ;  he  needs  coal  and  blankets  for  the  winter, 
and  also  other  urgent  necessities,  but  he  cannot  buy  any  of 
these  things  until  he  has  first  sold  his  wheat.  The  farmer  is 
now  confronted  with  the  time-gap.  In  this  case  the  time-gap 
is  not  apparent  at  first  sight  but  it  can  easily  be  recognized 
with  a  little  analysis.  The  time-gap  does  not  only  mean  the 
time  until  a  person  has  produced.  The  time  necessary  for  the 
8sale  must  also  be  added,  for  he  cannot  consume  before  he 
buys,  and  he  cannot  buy  before  he  sells.  Or,  we  may  look  at 
it  this  way :  the  man  has  produced  a  thing  according  to  his 
own  ideas  of  production  but  not  from  society's  point  of  view, 
because  society  does  not  consider  a  thing  as  produced  in  an 
economic  sense  unless  it  is  of  use  to  somebody  who  is  willing 
to  pay  for  it,  and  the  only  way  to  prove  its  usefulness  is  to 
try  to  sell  it ;  if  it  is  sold  its  usefulness  is  established ;  if  it  is 
not  sold  it  is  because  nobody  wants  it,  hence  it  is  not  useful 
and,  from  a  social  point  of  view  is  no  production  at  all.  I  will 
not  commit  myself  to  the  assertion  that  this  method  of  reason¬ 
ing  is  good  logic,  but  good  logic  or  bad  logic  it  is  logic  em¬ 
ployed  by  those  who  believe  that  to  the  worker  belongs  the 
full  product  of  his  toil.  In  any  case  the  prolongation  of  the 
time-gap  up  until  the  moment  of  sale  is  indisputable. 

162.  A  farmer  who  has  produced  wheat,  but  who  has  not 
vet  been  able  to  sell  it  is  facing  the  time-gap.  To  tide  over  this 
interval  he  may  borrow  money  from  the  money-lending-capi- 

8.  In  a  society  where  all  products  assume  the  form  of  commodi¬ 
ties,  these  commodities  must  be  sold  after  they  have  been  produced. 
Ic  is  only  after  their  sale  that  they  can  serve  in  satisfying  the  require¬ 
ments  of  their  producer.  The  time  necessary  for  their  sale  is  super 
added  to  that  necessary  for  their  production. 


lectors  IV— capitalism  and  the  wage  system. 


135 


talist,  and  buy  what  he  needs,  and  pay  back  the  amount,  after 
he  has  sold  his  wheat,  together  with  interest,  which  latter  is 
but  remuneration  to  the  money  lender  for  his  services  in  hav¬ 
ing  bridged  the  time-gap.  The  merchant,  in  the  mean  time, 
may  take  the  wheat  as  security  and  sell  it  in  behalf  of  the 
farmer.  Thus  we  see  that  the  merchant  is  essentially  a 
money-lender,  the  wheat  which  he  buys  being  a  security  for 
the  loam  According  to  the  Socialist  philosophy  a  merchant  is 
only  a  parasite  and  takes  profit  for  doing  nothing.  The  fact 
that  he  inverts  the  relation  of  production  to  consumption  and 
thus  bridges  the  time-gap  is  frankly  admitted,— sometimes, 
even  the  importance  of  the  service  is  admitted, — and  yet  his 
right  to  remuneration  for  this  important  service  is  ignored ! 

163.  The  manufacturing  capitalist  is  only  a  merchant  in 
a  more  extended  sense.  A  merchant  buys  finished  product. 
A  manufacturer  buys  unfinished  product  (raw  material,  mach¬ 
inery,  labor  power,  etc.)  In  other  words  he  buys  goods  in  the 
process  of  the  making.  He  thus  bridges  the  time-gap  a  little 
more  effectively  than  the  other  two  types  of  capitalist,  and 
he  therefore  now  stands  out  as  the  most  predominating  type. 
The  fact  that  the  manufacturing  capitalist  bridges  the  time- 
gap  is  so  evident  that  it  should  not  need  illustrations  to 
demonstrate  it,  and  still  for  some  reason  entirely  incompre¬ 
hensible  to  me,  I  have  found  that  while  many  Socialists  can 
see  the  time-p-ap  and  its  bridging  by  the  money-lender  and 
bv  the  merchant,  they  find  it  impossible  to  see  any  time-gap 
bridged  by  the  industrial  capitalist.  Therefore  at  the  risk  of 
tiresome  repetition  I  will  give  one  or  two  further  illustrations. 
Suppose  that  I  am  a  chemist,  and  that  I  intend  to  invent  a 
method  of  producing  sugar  from  the  pulp  of  corn  cobs.  Any 
chemist  will  grant  that  such  a  feat  is  not  impossible,  though 
it  has  not  as  yet  been  accomplished.  As  to  the  usefulness  of 
such  a  discovery  it  is  not  necessary  to  argue,  for  it  is  perfectly 
plain  that  such  an  achievement  would  be  far  more  useful  than 
the  making  of  diamonds  from  charcoal.  In  order  to  accom¬ 
plish  this  result  it  may  be  necessary  to  experiment  for  a  year 
or  two,  or,  perhaps  for  five,  ten,  or  even  twenty  years.  During 
this  time  I  shall  need  food,  clothing  and  shelter.  I  shall  need 
the  necessary  chemicals,  machinery  and  scientific  instruments 
such  as  the  chemical  balance  or  the  polarizing  microscope.  I 


136 


THE  UNEMPLOYMENT  PROBLEM. 


shall  also  need  books  giving  the  results  of  previous  endeavors 
of  other  chemists  along  this  same,  or  similar  lines.  Lastly 
I  shall  need  the  help  of  a  number  of  educated  and  uneducated 
laborers  to  help  me  in  my  investigation.  In  other  words  I 
must  consume  the  produce  of  the  labor  of  other  workers  before 
I  can  produce  my  formula  for  converting  corn-cobs  into  sugar. 
The  result  of  my  work,  if  successful,  may  be  worth  ten  times 
or  even  a  hundred  times  the  value  of  which  I  previously  con¬ 
sume  but  whatever  the  result  I  must  consume  before  I  pro¬ 
duce  ;  I  am  confronted  with  the  time-gap,  and  before  I  can  be¬ 
gin  my  researches,  this  problem  must  first  be  taken  care  of.  Be 
it  understood  that  neither  my  parents  nor  any  charitable  in¬ 
stitutions  can  help  me,  and  even  if  they  could  it  would  be 
too  much  to  expect  of  them.  But  a  capitalist  can  help  me, 
and  he  must  help  me  if  I  am  to  undertake  the  venture,  or  rathe** 
if  he  counts  upon  the  profit  arising  from  my  endeavor.  He 
may  lend  me  the  money,  or  buy  the  necessary  chemicals, 
machine  and  other  equipment,  and  lend  me  its  use.  He  may 
also  give  me  as  wages  a  sufficient  amount  to  cover  the  cost  of 
my  living  during  the  time  of  the  experiment.  And  then,  if  the 
work  is  successful  he  will  take  the  formula  for  what  it  is 
worth. 

164.  The  same  thing  is  true  of  all  kinds  of  labor.  In 
every  case  there  is  the  time-gap.  The  worker  is  willing  and 
able  to  produce,  but  his  produce  lies  in  the  future  and  is  not 
available  for  immediate  consumption,  but  he  needs  the  neces¬ 
sities  of  life  NOW ;  between  the  time  of  his  need  at  the  present 
moment  and  his  possible  product  of  the  future  (including  the 
future  sale)  is  the  time-gap.  The  wages,  or  rather  the  wage 
system,  is  the  method  of  bridging  the  time-gap.  This  is  why 
I  am  not  opposed  to  the  9wage-system.  The  Socialists  say 

9  .If  laborer  “B”  is  employed  with  surplus-values  produced  by  lab¬ 
orer  “A,”  then  in  the  first  place  “A”  supplied  this  surplus  value  without 
having  the  just  price  of  his  commodity  reduced  by  one  farthing, 
and  in  the  second  place,  thi-s  transaction  is  none  of  “B’s”  concern. 
What  “B”  demands  and  has  a  right  to  demand  is  that  the  capitalist 
should  pay  him  the  price  of  his  labor  power.  “Both  sides  are  gainers; 
the  laborer  by  having  the  fruit  of  his  labor  advanced  to  him  (that  is 
the  fruit  of  the  unpaid  labor  of  others)  before  he  has  performed  any 
labor,  (that  is,  before  his  own  labor  has  borne  fruit.)  .  .  .  .” — Marx, 
Capital,  Vol.  t,  page  642. 

The  quotation  in  the  above  is  from  Sismondi. 


I  ECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


137 


that  they  are  opposed  to  the  wage  system.  Can  they  explain 
why?  Can  they  give  one  single  argument  against  it?  They  can¬ 
not;  at  least,  I  have  never  come  across  their  argument  if  they 
have  any.  I  can  understand  a  man  being  opposed  to  come  par¬ 
ticular  phase  of  the  wage-system ;  we  might  discuss  fairly 
whether  the  wages  should  be  by  time  work  or  by  piece-work ; 
we  might  well  inaugurate  a  movement  to  stop  sweated  labor 
and  to  introduce  a  law  to  establish  the  minimum  wage.  On 
these  and  other  cognate  questions  there  is  ample  room  for  dif¬ 
ference  of  opinion,  but  as  to  the  question  whether  the  wage 
system  is  fundamentally  wrong  there  is  no  room  for  disagree¬ 
ment.  There  is  nothing  whatever  that  can  be  said  against  the 
principle  of  the  wage  system.  There  is  room  for  improve¬ 
ment  along  many  lines,  indeed  there  is  very  urgent  need  of 
some  improvement  also,  but  there  is  no  excuse  for  abolishing 
the  wage  system.  The  next  step  in  economic  evolution  will 
not  be  the  abolition,  but  the  perfection  of  the  wage  system,  or 
at  least  a  step  in  the  direction  of  such  perfection. 

165.  The  wage  system  is  a  system  of  production  where 
the  producer  receives  as  remuneration  a  stipulated  wage  for 
his  services,  the  whole  produce  of  his  labor  being  surrendered 
to  the  employer  in  exchange  for  the  wages.  Wages,  accord¬ 
ing  to  Marx  is  the  price  of  labor  power ;  I  should  define  wages 
as  price  of  effort.  The  two  definitions  are  nearly,  but  not 
quite  identical.  Effort  is  only  the  use  or  application  of  labor 
power  towards  a  useful  end.  Therefore  to  this  extent  the  two 
definitions  are  in  agreement,  but  they  differ  in  this,  that  the 
Marxian  definition  refers  to  the  wage  system  as  it  is,  or  rather 
as  Marx  thinks  it  is,  while  my  definition  refers  mainly  to 
the  ideal  wage  system,  that  is  to  the  wage  system  as  it  should 
be,  and  therefore  also  to  the  wage  system  as  it  is  in  theory,  but 
not  in  fact.  My  definition  approximately  applies  also  to  the 
wage  system  as  it  is,  but  in  this  respect  it  is  no  worse  than  the 
Marxian  definition,  for  that  definition  also  applies  only  ap¬ 
proximately  to  the  present  wage  system.  My  definition  pre¬ 
sents  an  ideal  or  objective  towards  which  we  may  direct  our 
efforts;  the  Marxian  definition  supplies  no  objective,  and  in 
the  absence  of  a  definite  objective,  the  modern  Socialist  re¬ 
volts  against  the  wage  system  as  a  whole,  and  therefore  un¬ 
knowingly  against  the  philosophy  of  scientific  Socialism,  and 


138 


THE  UNEMPLOYMENT  PROBLEM. 


turns  back  to  the  old  ideal  of  "to  the  producer  the  full  produce.” 

166.  “Wages”  in  theory  is  and  in  practice  should  be  the 
price  of  effort,  and  a  perfect  wage  system  would  be  one  in 
which  each  individual  would  receive  as  wages  an  amount 
proportional  to  his  effort,  no  matter  how  much  or  how  little 
his  produce  should  be.  The  wages  under  such  a  system  will 
not  depend  upon  his  success,  but  only  upon  his  effort,  the 
more  strenuous  and  earnest  the  effort,  the  higher  the  reward. 
At  this  stage  there  would  arise  the  question  as  to  how  the 
effort  should  be  measured.  By  what  chemical  balance  could 
the  efforts  of  a  hod-carrier  be  measured  with  those  of  a  watch¬ 
maker?  Which  constitutes  the  greater  effort,  that  of  the  chem¬ 
ist  who  by  patient  and  carefully  executed  experiments  sup¬ 
plies  the  basis  of  a  new  theory  of  matter,  or  of  a  mathemati¬ 
cian  who  analyses  the  data  supplied  by  the  chemist,  and  toils 
with  lengthy  equations  which  represent  that  new  theory? 
Which  needs  more  nerve,  the  dare-devil  leap  of  a  movie-actress 
from  a  railroad  train  into  a  roaring  torrent,  or  the  continuous 
facing  of  death  from  day  to  day  in  a  white  lead  factory?  How 
could  you  apportion  wages  according  to  effort  when  you 
do  not  know  how  to  measure  effort?  I  must  frankly  admit  that 
I  am  unable  to  answer  these  questions.  I  wish  I  could,  but  I 
cannot.  1  must  acknowledge  my  inabilitv  without  qualifica¬ 
tion  or  evasion.  But  with  my  acknowledgment  1  must  also 
add  that  the  time  to  answer  them  has  not  yet  arrived,  and  my 
failure  to  answer  them  therefore  has  no  significance  whatever. 
We  are  nowhere  near  the  promised  land ;  we  are  yet  far  away 
in  the  wilderness  and  it  is  idle  to  discuss  at  this  time  how  the 
Jordan  should  be  crossed.  When  we  reach  the  Jordan  we  shall 
see.  Maybe,  the  power  that  leads  us  and  guides  us  up  to  that 
point  will  also  part  the  waters  for  us,  that  is,  if  you  are  dis¬ 
posed  to  be  a  fatalist  or  inclined  to  believe  in  miracles.  Or  we 
might  take  a  rational  and  scientific  view;  the  engineers  in 
charge  of  the  expendition  will  study  on  the  spot  the  river  bed 
and  the  banks  and  construct  a  bridge.  Suffice  it  to  say,  that 
the  time  to  discuss  that  question  will  be  when  we  reach  there, 
not  now.  1  am  not  discussing  the  perfect  wage  system  at  this 
stage.  Our  present  duty  is  to  make  the  wage  system  better 
than  it  is  today.  When  the  time  to  introduce  the  perfect  wage 
s>  stem  comes,  the  men  whose  duty  and  privilege  it  will  be  to 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM, 


139 


meet  the  problem,  will  do  their  duty  as  best  they  can.  Our 
duty  now,  is  to  take  a  step,  towards  the  perfect  wage  system, 
not  a  step  away  from  it,  by  abolishing  it  entirely,  and  by  going 
back  to  the  good  old  plan,  that  they  may  take  who  have  the 
power,  and  let  them  keep  who  can.  The  Guaranteed  Employ¬ 
ment  system  is  in  no  sense  a  perfect  wage  system,  but  neither 
is  it  final.  When  in  the  course  of  evolution  the  time  to  inau¬ 
gurate  the  perfect  wage  system  comes  there  will  also  be  men 
fit  to  undertake  the  task.  To  me  has  been  assigned  the  humbler 
task,  to  bring  to  you  the  message  of  hope  and  inspiration,  and 
to  awaken  you  to  possibilities  of  the  glorious  day  when, 

"No  step  will  walk  with  aimless  feet 
Not  a  soul  shall  be  destroyed 
Or  cast  as  rubbish  to  the  void 
When  God  has  made  his  file  complete." 

From  two  to  five  million  men  of  all  trades  and  professions, 
willing  to  work,  able  to  work,  and  yet  unable  to  find  an  op¬ 
portunity  to  work,  tramping  the  streets  with  aimless  feet  from 
day  to  day,  cursing  the  day  when  they  were  born,  and  willing 
to  sell  their  souls  for  a  piece  of  bread,  cast  as  rubbish  upon  the 
industrial  scrap  heap  of  modern  civilization  f  Is  this  a  very  in¬ 
spiring  sight!  Now  weigh  against  this  a  system  where  every 
willing  and  able  worker  is  provided  for.  No  more  aimless 
feet ;  not  a  soul  to  be  bought  for  ten  cents ;  no  men,  women  or 
children  to  be  thrown  out  and  degenerated  into  unemployables. 
How  do  the  two  systems  compare?  Who  is  there  that  will  be 
opposed  to  the  Guaranteed  Employment  scheme  and  turn  back 
to  the  "full  produce"  game  with  all  the  horrors  that  it  means? 

167.  "Full  produce  system"  with  all  the  horrors  that  it 
means;  that  is  exactly  what  I  say.  This  is  no  idle  rhetoric.  I 
repeat  every  word  deliberately  to  show  that  I  mean  what  I 
say.  If  to  the  producer  belongs  the  full  produce  then  it  be¬ 
longs  to  no  one  else.  You  cannot  escape  this  conclusion.  It 
belongs  to  him  for  use,  for  hoard,  or  to  throw  away  or  to  trade 
with  another  person  on  such  terms  as  he  chooses  for  himself. 
If  it  belongs  to  nobody  else,  nobody  has  a  right  to  use  it. 
Therefore  a  man  who  has  not  produced  has  no  right  to  con¬ 
sume.  But  a  man  has  to  consume  first,  this  is  the  law  of 
Nature,  and  therefore  he  must  first  obtain  the  right  to  consume 
by  trading  away  his  right  to  his  future  product,  for  that  is  aL 


140 


THE  UNEMPLOYMENT  PROBLEM. 


he  can  trade  with, — that  is  all  the  exchangeable  assets  that  he 
possesses.  This  is  capitalism,  and  capitalism  of  the  most 
atrocious  type,  and  yet  the  Socialists  will  tell  you,  that  their 
ideal  is  “the  full  produce  to  the  producer.”  It  is  an  old  story — 
the  world  has  suffered  more  from  the  hands  of  honest,  well- 
meant,  earnest  fanatics  than*  from  villians.  The  religious  wars, 
and  the  Inquisition  were  not  invented  by  wicked  men  who 
enjoyed  the  sufferings  of  the  millions.  They  were  results  of 
honest  efforts  of  very  sincere  fanatics  who  meant  to  do  well, 
and  many  of  whom  themselves  went  to  the  stake  rather  than 
cause  suffering  to  others,  but  they  thought  they  were  doing 
good.  They  worked  in  the  name  of  Jesus,  and  they  sang, 
“Peace  on  earth,  good  will  to  men.”  In  spite  of  all  the  wars 
and  other  evils  that  they  set  on  foot  they  still  deserve  to  be 
forgiven  for  they  were  sincere  and  knew  not  what  they  did. 

168.  The  Socialists  mean  well;  their  sincerity  is  often 
above  suspicion,  and  their  enthusiasm  is  admirable,  but  their 
narrow  mindedness  and  dogmatism  is  regrettable.  If  they  have 
advocated  the  doctrine  of  “full  produce”  it  is  not  because  they 
are  wicked  and  want  to  cause  suffering,  it  is  because  they  are 
not  awake  to  the  full  measure  of  the  evil  which  that  doctrine 
involves.  They  cry  out  loudly  demanding  that  the  wage  sys¬ 
tem  be  crucified,  and  that  the  full  produce  system  be  released, 
because  they  know  not  what  they  do. 

-  169.  The  “full  produce  system”  is  essentially  ^anti¬ 
social.  It  is  individualism  carried  to  its  bitter  end.  It  is  at  the 
root  of  the  system  of  private  property  against  which  the  So¬ 
cialists  are  thundering  anathemas.  If  to  the  producer  belongs 
the  full  produce,  then  it  belongs  to  him  and  to  no  one  else.  If 
I  produce  a  new  anti-toxin  it  belongs  to  me.  Society  may  be 
scourged  by  a  plague,  and  men  and  women  be  dying  in  thou¬ 
sands,  but  what  is  that  to  me?  I  have  no  use  for  all  the  anti¬ 
toxin  in  my  possession,  but  that  makes  no  difference.  The 

10.  “As  a  matter  of  fact  this  traditionally  Socialist  standard  (‘the 
right  to  the  full  produce  of  one’s  labor?’)  is  not  Socialistic  at  all,  but 

the  essence  of  individualism . The  persistence  in  Socialistic  thought 

of  the  demand  for  the  ’full  product  of  one’s  labor’  is  a  survival  of 
primitive  handicraft  individualism.” — Skelton,  Socialism,  a  Critical 
Analysis. 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM 


141 


people  must  buy  it  from  me  and  on  terms  dictated  by  me,  or 
go  without  it.  If  Socialism  ever  succeeds  at  all  it  will  be  not 
by  adhering  to  the  doctrine  of  full  produce,  but  by  Abandon¬ 
ing  it.  It  is  one  of  the  ironies  of  history  that  Socialism  should 
advocate  the  most  anti-social  doctrine,  and  that  industrial 
capitalism  should  be  the  first  to  give  it  a  practical  challenge. 

11.  According  to  John  Spargo,  when  the  Socialists  talk  of  “full 
produce’’  they  don’t  mean  it.  But,  the  stupid  opponent  of  Socialism, 
“the  average  man,”  misconstrues  this  shibboleth,  as  he  misconstrues 
also  the  other  shibboleth,  (abolition  of  wage  slavery.)  (See  note  12 
infra.)  But  if  these  phrases  are  misleading,  and  liable  to  be  mis¬ 
understood  by  the  “average  man”  why  insist  on  using  them.  Surely 
the  English  language  is  rich  enough  to  permit  the  use  of  words  capable 
of  expressing  correctly  what  they  are  meant  to  express.  If  the  first  use 
oi  these  phrases  was  the  result  of  unlucky  choice,  due  to  unguarded 
error,  fifty  years  time  is  more  than  sufficient  for  revision,  and  sub¬ 
stitution  of  appropriate  phrases.  The  fact  seems  to  be,  that,  the  So¬ 
cialists  have,  with  good  intentions  no  doubt,  accepted  the  doctrine  of 
full  produce  in  all  earnestness,  in  blissful  ignorance  of  its  true  char¬ 
acter.  The  leaders  in  the  Socialist  movement  who  know  better  but  who 
lack  the  courage  of  their  conviction,  are  playing  the  facing-both-ways 
game,  trying  to  be  scientifically  correct,  and  unscientifically 
popular  at  the  same  time  For  example,  Morris  Hillquit  has 
evidently  abandoned  the  full  produce  claim,  and  yet  he  tries 
tc  maintain  a  semblance  of  the  orthodox  Socialist  ideal;  “  .  .  .  .  social 
justice  shall  be  established  by  returning  to  the  working  population 
as  a  whole,  the  full  product  of  their  labor.  .  .  .”  Note  the  words  “as 
a  whole.”  According  to  Hillquit’s  conception  of  justice  there  is  no 
need  for  each  individual  worker  to  get  the  equivalent  of  his  share, 
no  matter  how  much  or  how  little  he  produces.  He  (Hillquit)  will 
be.  satisfied  if  the  workers  as  a  whole  get  the  full  produce,  irrespective 
of  how  it  is  distributed  among  the  workers.  If  a  man  producing  ten 
cents  gets  nearly  one  thousand  dollars,  and  ten  men  producing  one 
hundred  dollars  each,  get  ten  dollars  each,  it  would  be,  according  to 
Morris  Hillquit,  an  equitable  distribution  in  conformity  with  his  con¬ 
ception  of  social  justice,  provided  the  total,  one  thousand  dallars  and 
ten  cents  remains  in  the  hands  of  the  eleven  workers.  Mr.  Morris 
Hillquit  has  (perhaps  unintentionally)  made  a  -sorry  mess  by  trying 
to  mix  individualism  with  Socialism.  The  doctrine  of  full  produce  is 
individualism.  Equal,  and  equitable  treatment  of  workers,  singly  and 
as  a  whole,  is  Socialism.  The  full  produce  to  workers,  as  a  whole,  is 
neither  the  one  nor  the  other.  It  is  ju-st  a  sample  of  meaningless 
rhetoric. 


142 


THE  UNEMPLOYMENT  PROBLEM. 


Incidentally  I  may  note  at  this  point  that  12scientific  Socialism 
does  not  take  its  stand  on  this  absurd  doctrine.  13Marx  never 
advocated  such  an  outrageous  system.  In  the  Communist 
Manifesto  he  advocated,  or  rather  forecast  a  state  of  society 
“in  which  free  development  of  each  is  the  condition  of  the  free 
development  of  all/'  Engels  speaks  of  it  as  a  state  in  which 
means  of  production  are  free,  and  man  also  free.  (Socialism 

12.  “Sociaists  are  too  often  judged  by  their  shibboleths  rather 

than  by  their  principles  which  those  shibboleths  imperfectly  express, 
or  seek  to  express.  Declaiming  rightly  against  the  wage  system  as 
a  form  of  slave  labor,  the  ‘abolition  of  the  wage  slavery’  is  forever 
inscribed  on  their  banner.  The  average  man  is  forced  to  the  conclusion, 
that  Socialists  are  working  for  a  system,  in  which  the  workers  will 
devide  their  actual  products,  and  then  barter  the  surplus  for  the  sur¬ 
plus  products  of  other  workers . Karl  Kautsky,  perhaps  the  great¬ 

est  living  exponent  of  modern  Socialism,  has  made  this  point  perfectly 
clear.  He  accepts  without  reserve  the  belief,  that  wages,  unequal 
and  paid  in  money  will  be  the  method  of  remuneration  for  labor  in 
the  Soc:alist  regime.” — John  Spargo,  Socialism,  page  315. 

Question:  What  does  Spargo  mean  by  “average  man”?  Does  he 
mean  average  Socialist,  or  average  non-Socialist?” 

13.  “Marx  never  argued  that  producers  of  wealth  had  a  right  to 
the  wealth  produced  The  ‘right  of  labor  to  the  whole  of  the  produce’ 
was,  it  is  true,  the  keynote  of  the  theories  of  Ricardian  Soc'alists.  An 
echo  of  this  doctrine  appeared  in  The  Gotha  programme  of  the  Ger-  I 
man  Socialists,  to  which  reference  has  already  been  made  (s^e  suo- 
plementary  note  below)  and  in  the  popular  agitation  of  Socialism  in 
this  and  other  countries  it  is  echoed  more  or  less  freouently.  Just 
in  proportion  as  the  ethical  argument  for  Socialism  is  advanced,  and 
appeal  made  the  sense  of  justice  the  rich  idler  is  condemned  and  the  I 
ethics  of  distribution  based  upon  production  becomes  an  important  I 
feature  of  propaganda.  But  Marx  nowhere  ind  lges  in  this  kind  of 
argument.  Not  a  single  line  of  ‘Capital’  or  his  minor  economic 
treatises,  can  any  hint  of  the  doctrine  be  found.  He  invariably  scoffs  j 
at  the  ‘ethical  distribution’  idea.” — John  Spargo,  Socialism,  page  229. 

SUPPLEMENTARY  NOTE — “It  is  true  that  such  phrases  as 
‘Labor  is  the  source  of  all  wealth’  are  constantly  met  with  in  the 
popular  literature  on  Socialism.  So  far  as  that  is  the  case  it  is  not 
due  to  teachings  of  Marx  but  rather  in  spite  of  it.  In  the  writings  of  | 
the  early  Ricardian  Socialists,  these  phrases  abound,  but  nowhere  in 
all  the  writings  of  Marx,  will  such  a  thing  be  found.  For  many  years 
the  opening  statement  of  the  programme  of  the  German  party  con¬ 
tained  the  phrase,  ‘Labor  is  the  source  of  all  wealth  and  all  culture.’ 
but  it  was  adopted  in  spite  of  the  protest  of  Marx.  The  Gotha  pro¬ 
gramme  was  adopted  in  1875.  a  draft  was  submitted  to  Marx  and  he  ; 
wrote  that  is  was  ‘utterly  condemnable  and  demoralizing  to  the  party.’  ” 
— John  Spargo,  Socialism,  page  225. 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


143 


Utopia  to  Science.)  While  Marx  and  14Engels  have  only 
ignored  the  full  produce  doctrine,  Kautsky  expressly  repud¬ 
iates  it  as  being  anti-Socialistic,  and  an  inheritance  from  the 
Bourgeois  mode  of  1  Thought.  But  though  this  doctrine  is 
foreign  to  and  incompatible  with  the  philosophy  of  scientific 
Socialism,  it  is  the  Socialism  of  the  rank  and  file.  It  is  the  So¬ 
cialism  of  Benson,  Hillquit,  Russell  and  Kirkpatrick.  Jt  is  the 
Socialism  of  the  American  Socialist,  the  New  York  Call  and 
the  Appeal  to  Reason.  It  is  the  Socialism  of  the  majority  of 
the  Socialist  voters  of  the  United  States.  This  is  the  reason 
why  I  have  taken  so  much  time  in  dealing  with  it. 

170.  Or  there  is  another  possibility;  it  is  possible  that  I 
have  misunderstood  Socialism,  and  that  the  Socialist  doctrine 
of  full  produce,  means  something  entirely  different  from  what 
I  understand ;  in  other  words  I  am  unknowingly  attacking  a 
nightmare  Socialism  of  my  own  creation.  In  order  to  leave  no 
room  for  needless  misunderstanding,  I  submit  a  statement  of 
the  doctrine  as  I  understand  it.  According  to  my  understand¬ 
ing  : — • 

(a)  If  a  person  produces  anything  singly  and  unaided,  the 

full  produce  belongs  entirely  to  him. 

(b)  If  several  persons  produce  anything  jointly,  the 

whole  product  belongs  jointly  to  all. 

(c)  In  such  a  case,  the  produce  cannot  generally  be  dis¬ 

tributed.  The  producers  are  therefore  entitled  to 

the  full  value  of  the  produce. 

14.  “In  a  society  of  private  producers,  private  individuals  or  their 
families  have  to  bear  the  cost  of  creating  intellectual  workers.  An 
intellectual  slave  always  commanded  a  higher  price,  and  intellectual 
workers  get  higher  wages.  In  an  organized  Socialist  society,  society 
bears  the  cost,  and  to  it  therefore  belong  the  fruits,  the  greater  value 
produced  by  intellectual  labor.  The  laborer  himself  has  no  further 
claim.  Whence  it  follows  that  there  are  many  difficulties  connected 
with  the  beloved  claim  of  the  worker  for  the  full  product  of  his  toil/’ — 
Engels:  Landsmarks  of  Scientific  Socialism  page  222.  Quoted  by  Dr. 
Skelton,  in  Socialism:  A  Critical  Analysis. 

15.  “  ‘To  each  accordng  to  his  deeds,’  will  always  be  found  in¬ 
applicable.  ....  Thi-s  notion,  ....  springs  from  the  modes  of  thought, 
that  are  peculiar  to  the  modern  system  of  private  property. — Kautsky’s 
Class  Struggle,  page  139. 


144 


THE  UNEMPLOYMENT  PROBLEM. 


(d)  All  persons  who  have  joined  in  the  production,  are 

entitled  to  a  share  of  the  produce,  or  of  the  value 
of  the  produce. 

(e)  In  apportioning  the  share  of  the  individual,  each 

worker  is  regarded  as  being  entitled  to  a  share 
of  the  produce  (or  its  equivalent  in  value)  in  pro¬ 
portion  to  the  labor  he  is  called  upon  to  contribute, 
in  order  to  do  his  part  of  work.  (The  actual 
amount  of  labor  spent  by  the  worker  may  be  more 
or  less  than  what  is  required  of  him ;  his  share  of 
produce  depends  not  on  the  actual  labor  spent,  but 
on  the  labor  he  is  expected  to  spend  under  the  ex¬ 
isting  condition  of  industrial  development.  This 
is  technically  referred  to  as  “socially  necessary 
labor”  or  more  briefly  “social  labor”).  Approxi¬ 
mately  speaking,  the  worker  is  entitled  to  a  share 
of  the  produce,  in  proportion  to  his  contribution 
of  labor.  Therefore  a  person  who  contributes  no 
labor  is  entitled  to  no  share  of  the  produce. 

(f)  In  computing  the  share  of  the  worker,  the  word  “pro¬ 

duction”  must  be  construed  in  its  most  extended 
sense.  It  includes  not  only  what  is  popularly  un¬ 
derstood  by  the  word  “production”  but  also  the 
several  auxiliary  processes,  such  as  production  of 
raw  material,  machinery,  tools,  transportation, 
storage,  sales,  etc.  It  includes  also  the  pro¬ 
cesses,  supervision,  control,  initiative  planning  etc. 

(g)  Productive  labor,  does  not  include  the  labor  of  mere 

stockholders.  Any  share  of  the  produce  which  is 
taken  by  the  capitalist  in  the  form  of  a  profit  must, 
therefore,  be  regarded  as  robbery.  Labor  spent  in 
the  process  of,  or  auxiliary  to,  taking  profit  does 
not  contribute  to  help  production,  and  therefore 
does  not  create  a  right  to  a  share  in  the  produce. 
The  profits  of  the  capitalist  must,  therefore,  be 
regarded  as  robbery,  no  matter  how  much  labor 
he  spent  in  collecting  the  profit.  But  what  the 
capitalist  takes  as  wages  for  supervision  (i.  e.,  when 
a  capitalist  happens  to  be  also  a  supervisor)  is  not 
robbery ;  as  a  supervisor  the  capitalist  is  a  pro- 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


145- 

ducer,  and  takes  only  the  equivalent  of  what  he 
produces  (assuming  for  the  sake  of  argument  that 
he  does  not  take  for  himself  higher  wages  than 
those  he  would  pay  to  a  hired  director  or  super¬ 
visor).  The  share  of  the  worker  is,  therefore,  in 
no  way  reduced  by  what  the  capitalist  takes  as 
wages  of  supervision.  What  the  capitalist  takes 
as  profit,  is  what  rightfully  belongs  to  the  sev¬ 
eral  workers,  whose  share  is  reduced  by  this 
amount, 

(h)  The  purpose  of  Socialism  is  to  give  to  each  worker 
the  full  produce  of  his  labor  in  this  sense,  viz :  his 
share  of  the  total  produce,  in  proportion  to  his 
labor,  taking  into  account  the  equivalent  shares 
of  all  other  workers,  who  have  contributed  labor, 
no  part  of  the  produce  being  deducted  for  payment 
to  anyone  who  has  not  contributed  his  labor  for 
the  purpose  of  production. 

NOTE — 1.  It  is  generally  conceded  by  all  Socialist  writers,  that  a 
deduction  for  the  cost  of  maintenance  of  government  is 
necessary,  and  that  under  Socialism,  the  share  of  the 
worker  will  be  deducted  by  that  amount.  It  is  not  clear 
whether  such  deduction  is  regarded  as  a  necessary  and 
unavoidable  evil,  or  whether  it  is  regarded  as  a  legiti¬ 
mate  apportionment,  being  the  share  of  government  em¬ 
ployees  for  their  share  of  labor  in  the  form  of  adminis¬ 
tration,  (administration  being  regarded  as  a  part  of 
“production”  in  its  extended  sense.)  I  am  also  unable 
to  say  whether  this  lack  of  clearness  vs  accidental  or  in¬ 
tentional.  It  is  certainly  not  due  to  a  mere  difference  of 
views  between  different  writers,  for  the  same  writer  often 
endorses  the  two  opposite  views. 

2.  It  is  generally  conceded  also,  that  a  second  deduction  will  be 
made  for  the  benefit  of  persons  unable  to  produce.  The 
need  of  such  a  deduction  is  always  recognized,  but  the 
measure  of  their  share,  and  the  basis  of  their  right  is 
generally  not  clear.  Whatever  the  basis  of  their  right, 
it  is  certainly  not  “the  producer’s  right  to  his  own  pro¬ 
duce”.  (x\ccording  to  my  analysis,  wages  should  be  the 
price  of  effort.  In  the  case  of  persons  unable  to  pro¬ 
duce,  the  mere  willingness  to  produce  is*  the  maximum 
effort,  more  effort  than  this,  being  impossible  by  the 
hypothesis  of  the  problem.  I  should  therefore  consider 
these  men  as  entitled  to  full  wages,  which  should  be 
paid  to  them  from  the  surplus  produce  of  other  workers, 


THE  UNEMPLOYMENT  PROBLEM. 


146 

to  which  surplus  the  producers  themselves  have  no  right 
or  title.) 

3.  A  third  deduction  for  public  utilities,  such  as  roads,  parks, 
street  lighting,  etc.,  and  a  fourth  deduction  for  creation 
of  new  capital,  is  also  sometimes  conceded.  With  the 
last  concession,  the  doctrine  of  “full  produce”  goes  en¬ 
tirely  out  of  existence;  but  I  am  sure  the  average  So¬ 
cialist  will  refuse  to  admit,  (perhaps  even  fail  to  recog-; 
nize)  the  surrender  implied  by  that  concession. 

This  is  what  I  understand  to  be  the  full  produce  doctrine 
of  the  Socialists.  If  this  statement  be  not  a  correct  presenta¬ 
tion  of  their  doctrine,  then  in  spite  of  my  earnest  efforts  I  have 
understood  nothing,  and  everything  I  have  said  against  the 
Socialists  is  a  mere  waste  of  time  and  breath.  It  is  the  duty 
of  the  Socialists  now  to  re-state  their  case,  in  simpler,  clearer, 
and  unmistakable  words  if  they  can,  so  as  to  preclude  the  possi¬ 
bility  of  a  misunderstanding.  In  the  meantime  I  must  proceed 
on  the  supposition,  that  the  Socialists  have  endorsed  the  full 
produce  doctrine,  in  good  faith  no  doubt,  but  without  realizing 
what  a  demoralizing  doctrine  they  had  endorsed,  and  that  they 
will  cheerfully  abandon  it  when  they  see  their  error. 

171.  The  Socialists,  as  I  said,  are  sincere,  well  meant  and 
enthusiastic.  If  there  is  any  person  whose  heart  bleeds  at  the 
suffering  and  misery  of  the  workers,  it  is  the  Socialist.  If 
there  is  any  field,  from  which  volunteers  for  the  fight  for 
economic  justice  may  be  called,  it  is  from  the  ranks  of  the  So¬ 
cialist  Party.  If  there  is  anywhere  today  a  religion  of  hu¬ 
manity  and  a  gospel  of  brotherhood  it  is  Socialism  that  is 
preaching  it.  How  comes  it  then  that  these  same  Socialists, 
have  taken  for  their  motto,  as  it  were,  the  most  anti-social 
doctrine,  "to  the  producer  belongs  the  full  produce  of  his  toil?”l 
It  is  no  answer  to  say  that  Marx  and  Engels  did  not  advo¬ 
cate  it,  for  the  question  still  remains  unanswered,  why  mil¬ 
lions  of  Socialists  have  accepted  it.  Nor  do  we  gain  anything 
by  using  the  words  "full  social  value”  in  place  of  full  produce; 
the  one  doctrine  is  as  anti-social  as  the  other.  We  are  forced 
to  choose  between  the  two  alternatives ;  either  that  the  Social¬ 
ists  are  not  Socialists  at  all,  and  that  all  the  talk  of  human 
brotherhood  and  social  equality  is  all  rank  hypocrisy,  or  that 
our  analysis  has  been  entirely  wrong  at  some  point,  that  in 
spite  of  the  apparently  perfect  reasoning  we  have  blundered 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


147 


somewhere  and  that  their  doctrine  is  right  after  all.  The  first 
alternative  is  entirely  out  of  the  question.  Millions  of  people 
acting  together,  fighting  together,  sometimes  even  suffering 
together,  cannot  be  hypocrites.  They  could  not  be  if  they 
wanted  to;  they  would  soon  betray  one  another  and  disin¬ 
tegrate  the  whole  movement.  Mistaken,  they  might  be,  but 
they  cannot  be  hypocrites ;  the  good  faith  of  the  Socialists  is 
above  question.  Nor  is  this  ideal  limited  to  Socialists  it  is 
endorsed  so  widely,  that  I  have  been  compelled  to  widen  the 
term  “Socialism”  so  as  to  make  it  cover  them  all.  You  cannot 
escape  the  difficulty  by  throwing  stones  at  the  Socialists ;  you 
will  have  to  throw  the  first  stone  at  Abraham  Lincoln!  When 
we  find  a  person  of  his  moral  eminence  and  love  of  justice 
endorsing  this  doctrine,  it  is  time  to  stop  and  think.  When 
millions  of  people  advocate  a  doctrine,  the  chance  is,  that 
there  is  some  element  of  truth  or  justice  underlying  that  doc¬ 
trine.  When  Abraham  Lincoln  stands  at  the  head  of  those  mil¬ 
lions,  the  chance  becomes  a  certainty.  There  can  be  no  doubt, 
that  the  doctrine  of  “full  produce”  contains  an  element  of  jus¬ 
tice.  Our  duty  is  to1  search  for  and  discover  that  element. 

172.  Socialists  claim,  that  to  the  producer  belongs  the 
full  produce  of  his  toil.  Why  full  produce?  Why  not  one-half, 
one-third  or  one-fourth?  Why  is  it  wrong  to  take  more  than  his 
full  share?  For  the  simple  reason  that  it  is,  or  at  least  it  is 
supposed  to  be  the  outcome  of  his  effort.  In  other  words  the 
doctrine  of  full  produce  is  only  a  practical  device  to  reward 
effort  in  proportion  to  its  merits.  It  is  the  first  step  towards 
the  perfect  wage  system.  This  is  the  element  of  truth, 
justice  and  equity  in  the  doctrine  of  “full  produce.”  We  have 
seen  already  how  difficult  it  is  to  measure  effort  adequately 
and  reward  it  accordingly;  the  need  of  some  method  of 
measuring  it  approximately,  must  have  been  felt  as  soon  as  a 
sense  of  justice  and  equity  was  awakened  in  the  human  heart.' 
It  is  also  evident  that  the  produce  of  labor  is  the  only  natural 
method  of  measuring  effort,  and  it  has  been  the  only  prac¬ 
tical  method  until  now.  But  this  method  of  rewarding  effort 
has  proven  to  be  a  complete  failure ;  produce  is  nowhere  pro¬ 
portional  to  effort,  and  this  method  of  equitable  distribution 
turns  out  to  be  an  instrument  of  greatest  iniquity.  When 
this  fact  is  once  realized,  half  the  social  revolution  will  have 


.148 


THE  UNEMPLOYMENT  PROBLEM. 


been  achieved.  In  the  first  place,  produce  is  not  necessarily 
proportional  to  effort;  secondly,  in  exchange  of  products,  the 
^equality  of  exchange  value  does  not  hold  true  for  individual 
exchanges,  because  the  exchange  is  always  between  parties 
who  are  unequally  needy,  and  the  one  whose  needs  are  more 
urgent  has  to  give  greater  produce  and  receive  less.  Thirdly! 
in  many  cases  one  of  the  exchanging  parties  has  no  ready 
made  produce  to  give  in  exchange;  he  has  therefore  to  barter 
away  his  future  producing  power.  The  man  whose  producing  j 
power  belongs  to  another  is  nearly,  if  not  quite,  a  slave, 
and  the  “full  produce"  system  carries  within  itself  the  germ 
of  industrial  slavery.  The  full  produce  system  thus  turns  out 
to  be  the  fountain  head  of  industrial  slavery. 

173.  A  perfect  wage  system  on  the  contrary,  giving  tc 
each  person  the  price  of  his  effort,  is  the  most  equitable  sys¬ 
tem  that  could  be  conceived.  True,  we  cannot  have  a  perfect 
wage  system  today ;  very  well  then,  let  us  have  the  next  best 
practicable  thing.  Let  us  have  a  system,  first,  such  that  every 
effort  will  be  rewarded  to  some  extent  if  not  to  the  full  ex¬ 
tent  ;  second,  that  the  reward  should  in  no  case  fall  below  a 
certain  minimum ;  if  we  are  unable  to  measure  effort,  and  if  we 
must  err  at  all  let  us  at  least  see  that  we  err  on  the 
safe  side;  third,  that  for  the  rest,  let  the  reward  be 
left  to  competition,  chance  and  accident  as  at  present,  taking 
steps,  continuously  and  progressively,  to  increase  the  elemen4 
of  competition,  and  diminish  the  element  of  chance  as  far  as 
human  power  permits.  The  Guaranteed  Employment  schenh 
formulated  in  the  previous  lecture  will  be  found  to  meet  thes( 
requirements,  but  if  perchance,  I  have  overlookd  something  " 
would  be  thankful  to  receive  your  comments  and  criticism! 
that  I  may  reconsider  and  revise  the  scheme. 

174.  As  a  matter  of  equity  and  social  justice,  the  wag* 
svstem  is  immeasurably  superior  to  the  full  produce  system 
The  full  produce  system  is  anti-social.  It  tends  to  make  even 
person  a  “dog  in  the  manger,"  barking  and  snapping  at  every 
one  that  approaches  his  hoard.  It  is  the  root  of  the  institution 
of  private  property.  It  places  the  sacredness  of  property  abov 

16.  The  Marxian  rule  of  “equality  of  exchange”  is  true  only  on  a 
average  in  the  long  run.  It  is  not  meant  to  be  applied  to  individua 
transactions. 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


149 


human  life.  By  ignoring  the  time-gap,  it  lays  the  foundation  of 
unemployment  with  all  its  evils.  Under  the  full  produce 
system,  the  relation  of  the  individual  to  society  is  expressed 
by  the  formula — each  to  receive  according  to  his  ability  and 
each  to  contribute  according  to  his  need — or,  we  may  simplify 
the  formula  still  further — take  what  you  can  and  give  what 
you  must.  In  complete  contrast  with  this  system  is  commun¬ 
ism,  which  is  represented  by  the  formula — give  what  you  can 
and  take  what  you  must.  This  was  the  system  taught  by 
Jesus,  practiced  by  his  apostles  and  17disciples.  That  this  sys¬ 
tem  failed  and  had  to  be  abandoned  may  prove  that  it  is  im¬ 
practicable,  or  rather  that  it  was  impracticable  at  that  time, 
but  the  righteousness  and  justice  of  the  system  is  indisput¬ 
able.  Between  these  two  extremes  stands  the  wage  system, 
whether  perfect  or  imperfect.  The  wage  system  is  represented 
by  the  formula — give  what  you  can,  take  also  what  you  can 
between  certain  limits.  The  perfect  wage  system  differs  from 
the  imperfect,  by  the  nature  and  character  of  those  limits,  and 
is  thus  an  intermediate  step  between  individualism  and  com¬ 
munism.  The  imperfect  wage  system  of  today  is  a  step  to¬ 
wards  the  perfect  wage  system.  In  point  of  righteousness,  the 
wrage  system  is  far  ahead  of  the  full-produce-system,  though  it 
is  not  quite  so  righteous  as  the  communism  of  Jesus  and  his 
disciples. 

175.  But  while  the  righteousness  of  the  wage  system 
may  be  conceded,  its  practicability  may  still  be  questioned. 
What  guarantee  is  there  that  the  little  germ  of  competition 
and  "get  what  you  can”  policy  may  not  lead  back  to  individual¬ 
ism  and  economic  slavery?  Whether  the  wage  system  will  pro¬ 
gressively  advance  and  evolve  into  ideal  communism  or  recede 
into  the  “each-man-for-himself-and-the-Devil-take-the-hinder- 
most”  state,  depends  wholly  upon  the  economic  forces  that 
dominate  the  modes  of  production  and  distribution.  You 
have  heard  of  the  Mississippi  river  flowing  southwards  down 
into  the  Gulf  of  Mexico.  No.  it  does  not  flow  downward;  any 
scientist  will  tell  you  that  this  river  is  flowing  up  hill,  i.  e., 
every  drop  of  water  when  it  reaches  the  ocean,  is  from  one  to 
three  miles  farther  from  the  center  of  the  earth,  than  it  is  at 


17.  Acts  11:45;  IV:34. 


150 


THE  UNEMPLOYMENT  PROBLEM. 


St.  Paul  or  St.  Louis.  If  the  earth  stop  rotating  tonight,  this 
river  will  flow  backward,  and  before  the  end  of  the  next  day, 
St.  Paul,  and  St.  Louis  will  be  under  water  several  miles  deep. 
If,  on  the  contrary,  the  rotation  were  quickened  by  about 
double  the  amount  the  river  will  rush  toward  the  ocean  with 
such  momentum  that  it  would  drain  the  northland;  Mexico 
and  Panama  would  be  deep  under  water  and  a  man  might 
walk  from  Quebec  to  Greenland  without  seeing  any  water, 
other  than  what  he  might  carry  with  him. 

176.  Whether  the  wage  system  will  develop  into  com¬ 
munism  or  into  free  capitalistic  competition,  or  stay  as  it  is 
depends  entirely  upon  the  economic  forces  that  control  and 
guide  the  course  of  evolution.  We  know  one  thing  for  cer¬ 
tain,  that  the  law  of  full  produce  is  impossible,  because  it  is 
unnatural.  Every  person  must  consume  before  he  produces ; 
any  attempt  to  persistently  enforce  the  law  must  lead  to  cap¬ 
italism  ;  for  capitalism  is  only  a  method,  and  so  far  the  only 
practical  method  of  obeying  the  law  formally  and  violating 
it  in  effect.  If  a  person  is  to  get  only  what  he  has  produced 
or  its  equivalent,  then  he  can  consume,  before  production,  only 
by  borrowing  from  somebody ;  that  “somebody”  then  becomes 
a  capitalist.  The  law  of  full  produce  necessarily  leads  to  cap¬ 
italism,  capitalism  leads  to  wage  system,  which  may  be  per¬ 
fect  or  imperfect,  but  it  is  always  a  wage  system.  Thus  we 
see  that  the  natural  course  of  evolution  is,  from  full  produce 
system  to  wage  system  and  not  backward.  Any  attempt  to 
reintroduce  the  full  produce  system  will  be  a  retrogressive 
movement,  and  we  will  have  to  go  over  the  whole  course  once 
more  until  we  reach  again  the  present  form  of  wage  system ; 
only,  since  we  have  gone  through  that  experience  once  we  will 
probably  reach  the  wage  system  stage  in  one  single  genera¬ 
tion  instead  of  wasting  centuries  to  reach  that  point.  There 
is  no  fear  of  going  back  from  the  wage  system,  i.  e.,  even 
from  the  crudest  and  worst  form  of  wage  system  to  full  pro¬ 
duce  system.  You  could  not  do  it  if  you  tried  with  all  the  re¬ 
sources  of  the  world  at  your  disposal..  The  stars  in  their 
course  are  fighting  against  it.  My  purpose  in  arguing  against 
the  full  produce  system,  is  not  that  I  am  afraid  of  such  a  sys¬ 
tem  being  introduced,  but  that  I  am  afraid  of  efforts  being 
made  in  this  impossible  direction ;  efforts  that  will  not  only 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


151 


be  wasted,  but  the  misguided  efforts  and  consequent  failure 
will  have  a  demoralizing  effect.  More  than  that,  a  retro¬ 
grade  move  generally  stays  the  course  of  evolution  and  ar¬ 
rests  progress.  The  whales  have  evolved  from  fishes;  they 
had  grown  into  air-breathing  animals,  but  they  went  back  to 
sea  and  attempted  to  be  fishes  again.  What  have  they 
achieved?  Other  land  animals  progressed,  some  more,  some 
less,  some  took  to  air  and  are  today  the  lords  of  the  upper 
world.  Some  developed  into  opposums,  thence  into  marmo¬ 
sets,  thence  by  degrees  into  lemurs,  apes,  antropoids,  man, 
civilized  man.  During  these  millions  of  years  the  whales  have 
not  even  regained  their  gills ;  they  are  drowned  if  held  under 
water  long  enough.  They  are  neither  land  animals  nor  fishes 
now.  Any  attempt  to  introduce  the  full  produce  system  cannot 
succeed,  but  it  may  deflect  the  course  of  evolution  and  paralyze 
progress ;  that  is  why  I  am  trying  to  oppose  that  unrighteous 
and  impossible  doctrine. 

177.  I  believe  that  the  wage  system  by  progressive  ad¬ 
vance  will  evolve  into  communism.  On  this  point  I  might  be 
wrong.  Maybe  it  will  evolve  into  something  else  or  again  it 
may  not  evolve  into  anything  in  particular,  but  just  into  a  bet¬ 
ter  and  still  better  type  of  wage  system.  Anyway  we  are  not 
discussing  communism,  but  wage  system,  and  we  would  not 
be  justified  in  such  a  digression  here,  except  for  the  purpose 
of  judging  the  ethical  merits  of  the  wage  system  by  compar¬ 
ing  it  with  what  has  been  recognized  by  universal  consent  as 
an  ideal  economic  system,  a  system  that  represents  the  King¬ 
dom  of  Heaven  on  earth  more  truly  than  any  other  known 
economic  system.  Marx  in  his  criticism  of  the  Gotha  pro¬ 
gramme  takes  the  same  view.  He  repudiates  the  full  pro¬ 
duce  doctrine  as  demoralizing  to  the  Socialist  Party;  he  sug¬ 
gests  a  more  advanced  wage  system  as  an  intermediate,  prac¬ 
tical  step,  with  the  communistic  form  of  distribution  as  an 
ideal  to  be  reached  only  when  right  time  comes. 

178.  The  contention  that  the  wage  system  is  really  a 
step  towards  communism  and  that  the  system  of  full  produce 
is  a  backward  and  anti-social  step  is  so  contrary  to  the  popular 
notions  on  this  subject  that  all  argument  in  support  of  that 
contention  would  be  of  no  avail  except  with  those  who  think 
for  themselves  and  accept  or  reject  an  argument  on  its  merits. 


152 


THE  UNEMPLOYMENT  PROBLEM. 


The  majority  take  their  opinions  second-hand;  to  them  the 
wage  system  must  be  wrong  because  Haywood  says  it  is 
wrong;  the  full  produce  system  must  be  right  because  Allan 
Benson  says  so.  And  lastly,  are  we  not  told  that  the  ethical 
ideal  of  Socialism  is  the  same  as  that  promulgated  by  Jesus 
Christ?  Why — even  the  28encyclopedia  admits  that!  If  it  could 
be  shown  by  reference  to  the  Gospels,  that  Jesus  condemned 
the  wage-system  and  advocated  the  full  produce  system  I 
would  certainly  reconsider  my  views — for  much  as  I  believe 
in  thinking  for  myself,  I  have  not  yet  begun  to  consider  my¬ 
self  infallible,  and  when  I  find  my  views  in  conflict  with 
those  of  other  thinkers  greater  than  myself,  I  think  it  my  duty 
to  revise  my  reasoning,  to  make  sure  that  I  am  not  thinking 
a  mistake.  What  has  Jesus  to  say  on  this  question?  Does  he 
condemn  the  wage  system? 

179.  “I.  For  the  Kingdom  of  Heaven  is  like  unto  a  man  that 

is  an  householder,  which  went  out  early  in  the  morning  to  hire 
laborers  into  his  vineyard. 

“2.  And  when  he  had  agreed  with  the  laborers  for  a  penny 
a  day,  he  sent  them  into  his  vineyard.  (Marginal  note:  The 
Roman  penny  is . seven  pence  half  penny.) 

“3.  And  he  went  out  about  the  third  hour,  and  saw 
others  standing  idle  in  the  market  place. 

“4.  And  he  said  unto  them;  go  ye  also  into  the  vine¬ 
yard,  and  whatsoever  is  right  I  will  give  you.  And  they  went 
their  way. 

“5.  Again  he  went  out  about  the  sixth  and  ninth  hour, 
and  did  likewise. 

“6.  And  about  the  eleventh  hour  he  went  out  and  found 
others  standing  idle,  and  saith  unto  them,  why  stand  ye  here 
all  the  day  idle? 

“7.  They  say  unto  him,  because  no  man  hath  hired  us. 

He  saith  unto  them,  go  ye  also  into  the  vineyard;  and  what¬ 
soever  is  right,  that  shall  ye  receive. 

“8.  So  when  even  was  come,  the  lord  of  the  vineyard 
saith  unto  his  steward,  call  the  laborers,  and  give  them  their 
hire,  beginning  from  the  last  unto  the  first. 


28.  This  claim  is  always  found  in  Socialist  literature,  although  I 
am  not  able  to  say  how  far  it  is  true.  Some  writers  are  more  specific. 
For  example,  Mr.  Carl  D.  Thompson  expressly  mentions  the  En¬ 
cyclopedia  Britannica,  as  admitting  that  “the  ethics  of  Socialism  are 
closely  akin  to  ethics  of  Christianity.”  Thus  far  I  have  not  been  able 
to  verify  this  citation. 


i.kcture:  iv— capitalism  and  the  wage  SYSTEM. 


153 


“9.  And  when  they  came  that  were  hired  about  the  elev¬ 
enth  hour,  they  received  every  man  a  penny. 

“10.  But  when  the  first  came,  they  supposed  that  they 
should  have  received  more;  and  they  likewise  received  every 
man  a  penny. 

’  “11.  And  when  they  had  received  it  they  murmured 
against  the  good  man  of  the  house. 

“12.  Saying,  these  last  have  wrought  but  one  hour,  and 
thou  hast  made  them  equal  unto  us,  which  have  borne  the 
burden  and  the  heat  of  the  day. 

“13.  But  he  answered  one  of  them  and  said,  Friend  I  do 
thee  no  wrong:  didst  thou  not  agree  with  me  for  a  penny? 

“14.  Take  that  thine  is,  and  go  thy  way:  I  will  give  unto 
this  last  even  as  unto  thee.” 

Matt.  XX  :1-14. 

Here  we  have  the  Kingdom  of  Heaven  compared  to  the  ideal 
wage  system,  where  the  wages  are  paid  according  to  the  effort 
to  produce,  ~ot  according  to  the  amount  produced,  nor  even 
according  to  the  period  of  active  employment ;  the  time  during 
which  a  worker  is  able  and  willing  to  work  being  also  paid  for, 
though  no  man  had  hired  him.  When  my  opponents  can 
point  out  an  ethical  authority  higher  than  Jesus  in  support  of 
the  full  produce  system,  it  will  be  time  for  me  to  reconsider 
my  views. 

180.  At  this  point  I  may  digress  a  little  to  discuss 
whether  Socialism  is  opposed  to  religion.  It  is  an  important 
question,  but  not  important  enough  to  take  a  lecture  by  itself; 
it  is  at  best  a  side  issue,  and  must  be  treated  as  such.  I  think 
I  may  deal  with  it  now  while  I  am  at  it,  and  be  done  with  it. 
The  popular  opinion  on  this  question  seems  to  be,  that  Scien¬ 
tific  Socialism  is  opposed  to  religion,  because  it  is  materialistic, 
and  is  therefore  opposed  to  religion  which  is  generally  theistic 
and  always  idealistic.  Judged  bv  the  same  standard  of  popular 
opinion,  popular  Socialism  is  not  opposed  to  religion,  nay  on 
the  contrary  it  is  the  highest  expression  of  religion.  This  is 
altogether  wrong:  the  facts  are  just  the  reverse;  popular  So¬ 
cialism  is  opposed  to  religion,  scientific  Socialism  is  not. 

181.  The  two  19fundamental  doctrines  of  scientific  So¬ 
cialism  are,  (1)  The  theory  of  materialistic  conception  of  his- 

19.  “These  two  great  discoveries:  the  materialistic  conception  of 
history,  and  the  revelation  of  the  -secret  of  capitalist  production 
through  surplus  value,  we  owe  to  Marx.  With  them  Socialism  be¬ 
came  a  science . ” — Engels:  Socialism,  Utopia  to  Science. 


154 


THE  UNEMPLOYMENT  PROBLEM. 


tory,  (it  would  be  more  correct  to  call  it,  theory  of  economic 
interpretation  of  history ;  it  is  altogether  incorrect  to  call  it 
economic  determinism),  and  (2)  the  theory  of  surplus  value  to¬ 
gether  with  its  corollary,  the  tneory  of  capitalistic  accumula¬ 
tion.  Of  these  two,  the  theory  of  surplus  value  is  neither  for 
nor  against  religion ;  neither  friend  nor  foe  has  drawn  it  into 
this  controversy,  and  we  can  safely  leave  it  out  of  this  discus¬ 
sion.  The  doctrine  of  materialistic  conception  of  history  is 
often  accused  of  being  opposed  to  religion,  but  it  is  no  more 
opposed  to  religion  than  is  the  theory  of  gravitation.  The  fact 
that  Marx  and  Engels,  the  first  propounders  of  the  theory  were 
irreligious  (i.  e.,  when  measured  by  the  orthodox  standard), 
does  not  prove  that  the  theorv  itself  is  opposed  to  religion. 
Suppose  for  the  sake  of  argument,  that  Newton  were  an 
atheist,  or  agnostic ; would  it  make  his  theory  of  gravitation 
irreligious,  or  anti-religious?  The  materialistic  conception  of 
history  was  an  attempt, — I  think  a  very  successful  attempt, — to 
reduce  history  to  science,  just  as  the  theory  of  gravitation  was 
an  attempt  to  reduce  astronomy  to  science.  The  two  theories 
are  so  like  one  another  in  their  nature,  that  it  is  impossible  to 
convict  the  one  and  acquit  the  other.  That  the  theory  of 
materialistic  conception  of  history  has  not  been  so  well  sup¬ 
ported  by  facts  as  the  theory  of  gravitation,  I  do  not  deny, — I 
may  even  concede,  that  later  research  may  prove  the  Marxian 
theory  to  be  entirely  wrong ;  but  whether  right  or  wrong,  that 
theory  is  in  no  way  opposed  to  religion.  If  it  is  possible  to  be¬ 
lieve  in  the  law  of  gravitation  without  surrendering  the  belief 
in  a  diety  behind  that  law,  whv  is  it  impossible  to  believe  in 
the  law  of  materialistic  basis  of  history,  without  surrendering 
one’s  belief  in  the  power  that  presides,  over  matter,  and  over 
the  laws  according  to  which  matter  operates  in  response  to 
that  Will  behind.  Maybe,  there  is  no  Will  or  Power, — who 
knows?  In  absence  of  direct  and  demonstrable  knowledge,  let 
each  one  decide  for  himself  as  he  thinks  best ;  there  is  nothing 
in  the  theory  of  materialistic  conception  of  history,  which  pre¬ 
cludes  a  belief  in  a  deity,  or  in  a  group  of  ethical  teachings, 
which  claim  to  have  been  insoired  by  that  deity.  In  other 
words  the  fundamental  principles  of  scientific  Socialism  are 
not  opposed  to  religion. 

182.  According  to  the  prophet  Micah  the  entire  concep- 


I,ECTURF,  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


155 


lion  of  religion  is  reduced  to  this :  “What  doth  the  Lord  re¬ 
quire  of  thee,  but  to  do  justly,  to  love  mercy,  and  to  walk 
humbly  with  thy  God?”  Wherein  is  the  doctrine  of  mater¬ 
ialistic  conception  opposed  to  this  conception  of  religion?  or 
take  the  Christian  standard.  “All  things  whatsoever  you  would 
men  should  do  unto  you,  do  ye  even  so  unto  them,  for  this  is 
the  law  and  the  prophets.”  Wherein  is  it  opposed  to  mater¬ 
ialistic  conception  of  history?  Or  again  take  one  of  the  Pagan 
conception  of  religion.  According  to  20Vedanta,  the  most  im¬ 
portant  school  of  Hindu  religious  philosophy,  “the  CAUSE  of 
all  phenomena  is  MATTER,  thus  says  the  scripture.”  Surely, 
this  one  religion  at  least  is  not  opposed  to  scientific  Socialism  \ 
Scientific.  Socialism — and  by  this  I  mean  the  twc  fundamental 
doctrines  of  scientific  Socialism — is  not  opposed  to  religion. 

183.  But  when  you  come  to  popular  Socialism  it  is  a  dif¬ 
ferent  story.  Almost  every  phase  of  popular  Socialism  is  op¬ 
posed  to  religion.  Religion  stands  for  “wage  system,”  popular 
Socialism  stands  for  “full  produce.”  According  to  religion,  all 
service  deserves  to  be  paid  irrespective  of  labor  spent  in  its 
performance ;  “They  also  serve  who  only  stand  and  wait.”  Ac¬ 
cording  to  popular  Socialism,  service  deserves  to  be  paid  only 
in  proportion  to  labor ;  service  without  labor  deserves  no  pay¬ 
ment  whatever.  There  are  various  other  points  of  conflict  be¬ 
tween  popular  Socialism  and  religion,  but  these  two  are  most 
important,  and  are  sufficient  to  condemn  the  former.  In  fact 
the  full  produce  doctrine  alone  is  enough  to  condemn  it.  It 
was  this  fiendish  doctrine  over  which  Marx  lost  his  temper 
when  he  denounced  the  Gotha  programme  of  the  Socialist 
party,  as  damnable  and  demoralizing.  To  conclude,  it  is  popular 
Socialism  that  is  opposed  to  religion,  not  scientific  Socialism. 

184.  The  present  wage  system  is  by  no  means  perfect.  It 
makes  no  provision  for  the  unemployed ;  but  even  as  it  is,  it 
is  an  enormous  improvement  over  the  older  system,  where  men 
were  18free  producers,  free  to  produce  if  they  happened  to  have 
the  means,  and  free  to  hang  themselves  if  after  producing  they 
found  themselves  unable  to  dispose  of  their  product.  “It  was 
their  own  fault.  They  were  free  to  produce  something  else, 
v/hy  did  they  not  produce  something  that  could  be  sold  ?  They 

20.  Vedanta-sutra,  1-4-27. 

18.  See  Lecture  I.  Para  11,  Note  13. 


156 


THE  UNEMPLOYMENT  PROBLEM. 


are  entitled  to  the  full  produce  of  their  labor  and  they  have  it. 
It  they  cannot  dispose  of  it  they  are  themselves  to  blame,  any¬ 
way  it  is  no  concern  of  ours/'  Now  there  steps  in  the  indus¬ 
trial  capitalist  with  his  wage  system.  He  gives  the  wages  to 
the  worker  and  takes  the  produce.  As  far  as  the  wage  earner 
is  concerned  he  is  certainly  better  off  than  if  he  had  the  full 
produce  which  he  can  not  promptly  sell,  or  which,  he  is  some¬ 
times  unable  to  sell  at  all.  The  weak  point  of  industrial  capi¬ 
talism  is  only  this,  that  it  cannot  provide  for  the  whole  of  the 
unemployed.  Low  wages  or  bad  conditions  of  labor  are  not 
caused  by  capitalism,  they  are  the  necessary  by-products  of  un¬ 
employment,  and  will  entirely  disappear  when  the  Guaranteed 
Employment  system  is  introduced  and  unemployment  is  elim¬ 
inated  ;  even  though  the  capitalistic  system  should  continue  for 
some  time.  The  reason  is  obvious.  All  the  evils  attributed  to 
capitalism  are  really  evils  of  unemployment,  none  of  them  are 
evils  of  capitalism,  no,  not  one. 

185.  The  real  objection  to  the  wage  system  is  not  that  the 
worker  receives  wages,  but  that  he  receives  only  a  part  of  his 
produce.  This  objection  is  only  another  way  of  saying  that  to 
the  producer  belongs  the  full  product  of  his  labor.  I  have 
shown  that  this  doctrine  is  anti-social,  that  it  is  impossible  to 
carry  out  in  practice  without  making  numerous  exceptions  and 
modifications,  and  that  it  does  not  even  serve  the  one  purpose 
which  is  its  pretence,  namely  to  reward  effort  adequately. 
But  all  these  objections  seem  to  be  forgotten  by  the  advocates 
of  that  doctrine.  They  seem  somehow  to  have  fixed  on  the 
idea  that  the  full  produce  doctrine  stands  for  social  and 
economic  justice  and  as  long  as  that  idea  remains  all  other 
objections  are  of  little  avail.  What  if  the  principle  fails  in 
practice?  We  must  make  it  work.  If  a  principle  of  justice  fails 
to  work  the  inference  is  obvious  that  there  must  be  a  greater 
injustice  somewhere  in  our  social  dealings  which  counteracts 
this  principle.  It  is  our  duty  then,  to  find  out  and  eradicate 
the  other  injustice  and  not  to  ignore  a  principle  of  justice  be¬ 
cause  the  world  is  not  right  enough  for  it.  If  the  world  is  not 
right,  it  must  be  made  right.  The  objection  that  the  principle 
is  anti-social  is  also  disposed  of  in  the  same  way.  If  giving  the 
worker  the  full  produce  of  his  work  be  not  conducive  to  the 
welfare  of  society,  then  so  much  the  worse  for  such  a  society. 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


157 


A  society  that  cannot  thrive  and  prosper  under  justice  has  no 
right  to  prosper,  no,  not  to  exist.  If  the  principle  does  not  fit 
in  with  the  needs  of  society,  society  must  remodel  itself  and 
readjust  its  needs.  The  full  produce  system  is  a  principle  of 
justice,  and  justice  comes  before  everything  else.  This  is 
their  plea. 

186.  The  whole  question  then  turns  upon  the  justice  of 
the  full  produce  scheme.  If  the  scheme  be  an  ambodiment  of 
justice  everything  that  I  have  said  against  it  falls  to  the  ground, 
and  the  wage  system  stands  condemned,  Jesus  and  his  para¬ 
bles  notwithstanding.  Is  the  full  produce  system  just  or  un¬ 
just?  On  the  answer  to  this  question  depends  the  ethical  justi¬ 
fication  or  condemnation  of  the  wage  system.  Does  the  pro¬ 
duce  belong  wholly,  or  even  in  part  to  the  producer?  That 
depends  upon  what  is  produced,  why  it  is  produced  and  how 
it  is  produced. 

187.  It  depends  upon  what  is  produced.  A  girl  wishes 
to  marry  a  man  of  her  choice.  The  parents  object,  not  because 
she  is  too  young  to  know  what  is  good  for  her,  but  be¬ 
cause — as  they  claim — she  has  no  right  to  dispose  of  herself, 
because  she  did  not  produce  herself.  She  was  produced  by 
the  parents  to  whom  she  belongs  and  who  have  the  right  to 
dispose  of  her  as  they  please.  Is  the  claim  of  the  parents  valid? 
No.  The  producer's  right  depends  upon  what  is  produced. 

188.  It  depends  upon  why  it  is  produced.  A  novelist  writes 
a  piece  of  fiction.  He  is  considered  entitled  to  the  full  pro¬ 
duct  of  his  imagination.  He  is  given  the  copyright  which  is 
the  right  to  his  product.  A  newspaper  reporter  sends  in  an 
imaginary  story  to  his  paper.  The  sensational  news  helps  to 
sell  millions  of  copies.  The  reporter  is  charged  for  fabrication 
of  news  and  escapes  the  penitentiary  by  a  technical  flaw  in  the 
evidence  of  the  prosecution.  He  now  claims  a  part  of  the 
profit  of  the  sensational  number ;  he  claims  the  right  to  the  full 
produce  of  his  imagination,  like  that  of  the  novelist.  Will  the 
courts  sustain  his  claim?  No.  His  right  to  the  proceeds  of 
the  sale  denends  upon  why  he  fabricated. 

189.  The  right  depends  upon  how  it  is  produced.  An  in¬ 
ventor  conceives  a  new  idea  and  makes  a  sketch.  A  clerk  in 
his  office  secretly  copies  that  sketch ;  when  accused  of  robbing 
the  inventor  he  pleads  not  guilty.  "Your  honor/’  he  says,  "I 


158 


the:  unemployment  problem. 


did  not  steal  another  man’s  produce;  the  inventor’s  sketch  is 
in  his  note  book  and  still  in  his  possession,  but  I  produced  the 
copy  myself.  It  is  the  product  of  my  labor  and  therefore  be¬ 
longs  to  me !”  No  judge  would  accept  such  a  plea,  for  the  pro¬ 
ducer’s  right  depends  upon  how  a  thing  is  produced. 

190.  The  mere  production  of  anything  does  not  by  itself 
create  the  producer’s  right  to  it.  The  right  depends  upon 
various  other  conditions  and  may  be  total  or  partial  or  it  may 
not  exist  at  all.  It  depends  upon  the  particular  circumstances. 
Suppose  I  invent  a  method  of  extracting  gold  from  the  sea 
water,  make  the  necessary  apparatus  and  extract  a  pound  of 
gold  in  one  day.  Am  I  entitled  to  take  that  gold?  You  say, 
'  yes.”  Suppose  I  extract  a  hundred  tons  in  one  day.  You 
smile  but  still  say  "yes.”  If  a  man  extracts  one  ton  of  gold  in 
a  day  he  deserves  to  have  it.  That  is  your  argument.  Suppose 
I  extract  all  the  gold  in  the  sea  in  one  day,  would  I  still  be  en- 
entitled  to  it?  You  hesitiate  a  moment,  and  finally  decide  that 
the  producer  has  a  perfect  title  to  it.  It  may  be  dangerous  and 
inexpedient  to  permit  a  man  to  possess  such  an  enormous  pow¬ 
er.  but  you  also  realize  that  violence  to  justice  is  even  more 
dangerous ;  and  besides,  expediency  has  nothing  to  do  with  the 
question.  Is  the  producer  entitled  to  all  the  gold  he  produces 
according  to  our  standard  of  justice  and  without  regard  to 
expediency?  We  say  "yes.”  To  the  producer  belongs,  or 
rather  ought  to  belong  the  full  product  of  his  labor. 

191.  Now  let  us  take  another  example.  A  chemist  de- 
velpes  a  new  method  of  extracting  oxygen  from  the  atmos¬ 
phere.  He  extracts  one  pound  of  oxygen  every  day.  Is  he 
entitled  to  that  produce?  Without  the  least  hesitation  you  say 
"yes.”  But  suppose  he  extracts  one  million  pounds  a  day.  Is 
he  entitled  to  that  much?  Now  you  begin  to  hesitate.  Some 
say  "yes”  but  do  not  seem  sure  about  it ;  others  say  "no.”  Lastly, 
let  us  suppose  he  extracts  all  the  oxygen  and  stores  it  in 
barrels  and  doles  it  out  to  the  public  on  payment  of  whatever 
he  can  get  for  it.  Is  he  entitled  to  all  the  oxygen  in  his  posses¬ 
sion,  or  to  what  he  can  get  in  exchange  for  it?  There  can  be 
no  hesitation  now;  no  person,  whatever  his  ethics  or  politics, 
would  favour  such  ownership :  our  professed  faith  in  the  doc¬ 
trine  of  full  produce  notwithstanding.  And  yet  there  is  no  dis¬ 
tinction  between  the  extraction  of  gold  from  the  sea  and  the 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


159 


extraction  of  oxygen  from  the  air.  The  extraction  of  oxygen 
by  one  man  may  be  very  inconvenient  for  the  others,  but  what 
of  that?  If  it  is  right,  it  is  right,  and  we  must  bear  our  incon¬ 
venience  with  philosophic  resignation.  We  cannot  have  one 
standard  of  justice  for  gold  and  another  for  oxygen;  we  must 
either  accept  the  ownership  of  the  means  of  life  as  right,  or 
repudiate  the  doctrine  of  full  produce.  There  is  no  third  alter¬ 
native. 

192.  I  do  not  claim  to  have  proved  as  yet  that  the  doc¬ 
trine  of  full  produce  is  wrong;  I  have  only  proved  that  a  re¬ 
pudiation  of  the  doctrine  is  the  only  alternative  to  what  may 
be  called  the  social  slavery  to  owners  of  the  means  of  livelihood. 
But  we  have  not  yet  proved  such  slavery  to  be  morally  wrong. 
It  may  be  very  disagreeable  to  those  who  have  to  bear  the  yoke, 
and  may  be  often  a  great  misfortune,  resembling  in  effect 
storms,  earthquakes  and  diseases,  something  to  be  avoided  if 
possible,  but  to  be  borne  with  fortitude  when  unavoidable. 
The  question  before  us  is  not,  whether  or  not  the  full  produce 
doctrine  if  carried  to  its  logical  consequence  would  lead  to 
results  harmful  to  many,  but  whether  it  is  right,  that  is,  right 
according  to  our  present  day  conception  of  right  and  wrong, 
that  is  in  other  words  according  to  our  present  day  standard 
of  21justice.  Is  the  producer  entitled  to  the  full  produce  of  his 
labor?  Why  is  he  entitled  to  it?  What  is  produce?  And  lastly, 
who  is  a  producer? 

193.  A  man  crosses  the  ocean,  goes  over  to  another  con¬ 
tinent,  takes  possession  of  land  and  puts  up  a  fence  to  keep 
out  late  comers.  Is  he  justified  in  the  possession  of  this  land? 
Has  he  produced  the  land?  A  second  man  goes  to  Alaska,  dis¬ 
covers  a  vast  field  of  gold,  takes  possession  of  all  the  gold  with¬ 
in  his  reach;  has  he  produced  the  gold?  A  third  man  goes  to 
Mahoning,  scrapes  the  soil  and  collect  the  iron  ore ;  has  he  pro¬ 
duced  the  ore?  A  forth  goes  to  Colorado,  bores  a  shaft  a  thou¬ 
sand  feet  deep  and  takes  possession  of  the  coal ;  has  he  pro¬ 
duced  the  coal?  A  fifth  goes  to  Vermont,  selects  a  piece  of 

21.  The  question,  whether  our  present  day  conception  of  right 
and  wrong  is  correct  or  incorrect  is  irrelevant.  Whenever  we  discuss 
the  moral  standing  of  any  claim  we  always  mean  the  moral  standing 
according  to  our  conception  of  the  fundamental  principles  as  we 
understand  them  at  the  time  I 


160 


the;  unemployment  problem. 


marble,  chisels  away  all  excess  material  until  a  beautiful  statue 
of  Appollo  or  Diana  stands  out  to  view ;  has  this  sculptor  pro¬ 
duced  the  statue?  No  more  than  the  Mahoning  miner  pro¬ 
duced  the  ore.  The  statue  was  there  inside  the  marble  all  the 
time  awaiting  a  sculptors  skillful  fingers.  His  only  achieve¬ 
ment  is  to  take  possession  of  what  already  existed.  There  is 
no  such  thing  as  production,  with  one  exception,  which  I  will 
discuss  later.  All  the  so-called  production  is  merely  the  pro¬ 
cess  of  taking  possession.  Sometimes  it  is  a  simple  process 
such  as  walking  over  to  where  the  thing  lies.  Sometimes  it 
is  a  little  more  difficult  such  as  boring  into  the  earth,  as  is 
the  case  in  mining.  Sometimes  training  and  skill  are  needed 
as  in  the  case  of  the  sculptor.  Sometimes  it  requires  the  use  of 
machinery  as  is  the  case  of  extracting  oxygen  from  the  air. 
Sometimes  patience  is  the  most  necessary  requisite,  such  as 
in  trapping  and  hunting,  waiting  for  the  thing  to  come  to  you, 
or  as  in  farming,  waiting  for  the  crops  to  grow.  But  in  all 
cases  it  is  merely  a  process  of  taking  possession.  This  fact 
once  clearly  understood,  there  is  no  longer  any  difficulty,  as  to 
whether  the  producer  is  entitled  to  his  produce  or  not.  The 
worker  produces  nothing  and  is  entitled  to  nothing  on  the 
strength  of  this  claim.  His  work  in  all  cases  consists  of  taking 
possession  of  what  in  popular  language  is  called  “his  produce/’ 
194.  Possession  alone  does  not  create  the  right  to 
possess.  If  a  person  has  a  right  to  a  thing  before  he  takes  posses¬ 
sion,  he  retains  the  right  after  the  possession  also,  and  this 
right  will  remain  although  the  labor  in  taking  possession  be 
infinitisimal.  Similarly  if  the  worker  has  no  right  to  it  at  the 
start,  no  amount  of  labor  can  give  him  the  right.  The  oxygen 
in  the  air  belongs  equally  to  all,  and  I  have  a  right  to  my  share 
of  it.  I  may  take  the  whole  or  a  part  of  that  amount  with  or 
without  labor  as  may  be  necessary.  I  take  a  part  of  my  share 
of  oxygen  every  minute  of  my  life  at  every  breath  I  draw,  with 
almost  no  labor,  (part  of  which  oxygen  I  retain  in  my  system.) 
If  I  want  more  than  this  for  any  other  use,  e.  g.,  for  arts,  in¬ 
dustries  or  commerce,  I  must  install  the  necessary  apparatus, 
chemicals,  and  machinery.  I  am  entitled  to  all  the  oxygen 
I  take  possession  of  (I  produce  in  the  popular  language)  pro¬ 
vided  I  do  not  take  more  than  my  share.  This  oxygen  is  mine 
not  because  I  produce  it ;  I  am  entitled  to  produce  it  (i.  e.,  take 


lecture:  iv— capitalism  and  the  wage  SYSTEM. 


161 


possession  of  it)  because  it  belongs  to  me.  This  explains  why 
we  instinctively  regard  one  pound  of  oxygen  as  rightfully  be¬ 
longing  to  the  producer;  why  we  hesitite  over  the  question  of 
a  million  pounds,  (because  we  are  not  sure  whether  a  person 
in  extracting  a  million  pounds  has  not  exceeded  his  limit)  and 
lastly  also,  why  we  unhesitatingly  refuse  to  recognize  the  right 
of  men  to  extract  all  the  oxygen  no  matter  how  much  labor  he 
spends  in  the  process  of  extracting  it.  A  man's  right  to  the 
produce  of  his  labor  does  not  depend  upon  the  labor  spent  in 
producing  it  (i.  e.,  taking  possession  of  it).  If  he  has  the  right 
to  it,  before  production,  he  will  retain  that  right  although  no 
labor  is  expended.  If  he  has  no  right  to  it  to  start  with,  no 
amount  of  labor  will  give  him  that  right.  A  burglar  who 
climbs  up  to  the  third  story,  opens  a  window,  cracks  a  safe, 
and  takes  possession  of  the  contents  does  not  thereby  obtain 
the  right  to  those  contents.  The  doctrine  that  a  worker  is 
entitled  to  the  full  produce  of  his  labor  has  no  moral  justifica¬ 
tion.  There  is  no  such  thing  as  produce.  All  the  so-called  pro¬ 
duce  is  merely  a  process  of  taking  possession.  The  world  be¬ 
longs  collectively  to  all,  and  distributively  to  each  according  to 
his  share.  To  each  belongs  his  share  or  such  part  of  his  share 
as  he  may  take  22possession  of. 

195.  As  I  said  before  there  is  one  exception  where  the 
worker  produces  in  the  real  sense.  In  this  case  the  produce  is 
a  real  produce  not  merely  a  taking  possession.  A  sculptor  who 
makes  a  statue  or  an  engineer  who  constructs  an  aqueduct, 
have  first  to  create  a  mental  image  of  what  they  wish  to  do. 
They  have  also  to  create  a  mental  picture  of  the  several  pro¬ 
cesses  they  will  have  to  adopt  to  reach  the  desired  result.  This 
is  production  in  the  true  sense ;  the  rest  is  all  taking  posses¬ 
sion.  Even  the  simplest  form  of  work  requires  a  production 
of  this  kind,  sometimes  followed  by  the  possession  of  the 
means  of  production,  such  as  chisels,  mathematical  tables  or 
well  trained  fingers,  wrists  and  arms;  this  is  auxiliary  posses- 

22.  The  question  whether  the  possession  of  the  larger  capitalists 
are  within  the  limit-s  of  their  legitimate  share  or  exceed  that  share 
naturally  suggests  itself,  but  we  cannot  stop  to  discuss  it  here.  It  will 
be  discussed  under  capitalism  and  centralization.  At  present  the  dis¬ 
cussion  is  limited  to  the  wage  system. 


162 


the:  unemployment  problem. 


sion.  All  this  production  corresponds  to  what  is  known  in  the 
literature  of  scientific  Socialism  as  “Labor-power.”  Every 
worker  is  entitled,  not  to  the  full  produce  of  his  labor,  or  its 
equivalent  of  social  value,  but  to  his  labor  power  or  its  equiv¬ 
alent  in  social  value.  The  value  of  labor  power  is  wages. 
Therefore,  a  worker  is  morally  entitled  to  23wages,  nothing 
more,  nothing  less.  He  has  certainly  no  right  to  the  full  pro¬ 
duce  of  his  labor. 

196.  Under  capitalism  the  form  of  remuneration  is  what 
is  known  as  the  wage  system.  The  worker  receives  not  the  full 
produce  of  his  toil,  nor  its  equivalent  in  value,  but  only  the  full 
price  of  his  labor  power.  This  is  an  important  step  indeed. 
But  under  capitalism,  there  is  some  labor  power  that  is  not 
paid  anything  at  all,  viz :  unemployed  labor  power ;  this  is  the 
weak  spot  of  capitalism.  A  Guaranteed  Employment  system 
will  correct  this  omisssion  and  place  the  wage  system  on  a  just 
and  logical  basis. 

197.  There  is  another  and  far  stronger  reason  why  the 
worker  is  not  entitled  to  the  full  produce  of  his  labor  (using 
the  word  produce  as  popularly  understood.)  The  total  pro¬ 
duce,  according  to  Marxian  analysis,  consists  of  two  parts,  the 
necessary  produce  and  the  surplus  produce.  Of  these  two  the 
worker  receives  the  necessary  produce,  or  more  correctly,  its 
equivalent  in  value,  in  the  form  of  wages.  On  this  point  there 
is  no  need  of  further  discussion.  The  capitalist  takes  the  sur¬ 
plus  24produce.  This  is  the  bone  of  contention.  The  Socialists 
claim  that  this  surplus  belongs  to  the  worker  because  he  25pro- 

23.  (With  the  wage  system  under  capitalistic  mode  of  pro¬ 
duction.)  “Every  condition  of  the  problem  is  satisfied,  while  the  laws 
that  regulate  the  exchange  of  commodities  have  been  in  no  way  vio¬ 
lated.  Equivalent  has  been  exchanged  for  equivalent.  For  the  capi¬ 
talist,  as  buyer,  paid  for  each  commodity,  for  the  cotton,  the  spindle 
and  the  labor  power,  its  full  value.’’ — Marx,  Capital,  Vol  I,  page  217. 

24.  The  capitalist  takes  only  a  part  of  the  surplus.  The  worker 
gets  the  other  part.  The  individual  worker’s  share  of  the  surplus  is 
generally  very  small,  but  it  is  still  large  enough  to  have  an  important 
sociological  significance.  For  the  present,  however,  I  have  entirely 
ignored  the  worker’s  share  of  surplus  received,  as  if  the  capitalist  ap¬ 
propriated  the  whole  of  the  surplus,  and  the  worker  got  no  part  of  it. 

25.  This  claim  of  the  popular  soap-box  Socialist  has  no  support 
in  Marxian  philosophy.  According  to  Marx  the  surplus  does  not 
properly  belong  to  the  waee  worker.  (See  Para.  164.  foot  note  9.)  See 
also  Capital,  Vol  I,  page  216.) 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


163 


duces  it.  The  capitalist  not  only  challenges  this  claim,  but  sets 
up  a  counter  claim  for  himself.  At  this  point  we  are  not  con¬ 
cerned  with  the  claims  of  the  capitalist,  but  the  wage-worker’s 
claim  deserves  a  serious  and  careful  study.  Does  surplus  be¬ 
long  to  the  worker  by  virtue  of  his  having  produced  it?  Is  it  a 
valid  claim,  that  is,  valid  according  to  our  present  day  standard 
of  equitable  reward? 

198.  The  mere  fact  that  the  worker  produces  the  surplus 
creates  no  such  moral  claim.  Every  worker  has  to  consume 
before  he  can  produce.  He  can  only  consume  from  the  surplus 
of  those  that  have  gone  before  him.  His  surplus,  therefore, 
belongs  to  those  that  are  to  follow  him.  This  is  so  plain  that 
I  do  not  know  how  to  make  it  simpler.  If  you  cannot  accept 
this  conclusion,  I  must  give  up  the  whole  effort  as  utterly  im¬ 
possible.  One  may  well  question  the  right  of  the  capitalist  to 
collect  this  surplus ;  one  may  suggest  what  he  considers  a 
better  method  of  collecting  the  surplus  from  one  generation 
and  handing  it  over  to  the  next;  one  may  question  the  ef¬ 
ficiency  of  the  capitalistic  method  of  collecting  surplus  and  hold¬ 
ing  it  in  trust  for  the  coming  generation ;  one  may  even  im¬ 
peach  capitalism  for  its  failure  to  discharge  its  duty  as  trustee 
for  the  coming  generation,  and  lastly,  one  may  question  the 
equity  of  the  ratio  in  which  the  surplus  is  divided,  leaving  an 
insignificant  margin  for  the  workers  who  produce  it,  and  the 
lion’s  share  for  the  coming  generation  who  have  contributed 
nothing  towards  its  production,  (as  if  we  had  done  anything 
to  earn  the  surplus  which  we  consumed  before  our  production 
began.)  We  may  raise  numerous  other  questions  but  there 
is  no  room  whatever  as  to  the  need  of  future  generations.  The 
needs  for  their  consumption  can  be  supplied  only  from  the  sur¬ 
plus  produce  of  the  present  day  worker.  The  present  day 
worker  received  surplus  from  the  past  generation,  and  owes 
a  moral  debt  which  can  be  paid  only  by  the  surrender  of  a  part 
of  their  surplus  for  the  future  generations.  The  capitalist  col¬ 
lects  this  surplus  or  rather  this  part  of  surplus  and  holds  it  as  n 
26trust  for  the  coming  generation.  The  capitalistic  method 
may  not  be  the  best  method,  but  it  is  at  present  the  only 
method.  Whatever  we  mav  have  to  say  for  or  against  it,  the 


26.  See  Lecture-  III,  Para.  122,  note  14. 


164 


THE:  UNEMPLOYMENT  PROBLEM. 


worker's  claim  to  the  full  produce  of  his  labor  has  not  a  leg 
to  stand  on.  The  full  price  of  his  labor  power  is  all  he  can 
rightfully  demand.  “Full  produce"  is  an  impossibility.  A  bet¬ 
ter  wage  system  is  all  that  can  be  or  should  be  expected,  but  as 

long  as  unemployment  remains,  the  wage  system  cannot  be 
bettered.  So  here  is  your  choice :  either  a  Guaranteed  Employ¬ 
ment  system,  with  a  consequent  improvement  in  the  wage- 
system  in  the  direction  of  perfection,  or  an  unguaranteed  sys¬ 
tem  together  with  what  you  call  the  wage  slavery.  The  full 
produce  system  is  impossible.  You  cannot  get  it  at  any  price. 
There  are  only  two  systems  to  choose  between.  Now  make 
your  choice. 

199.  Incidentally  this  brings  up  another  important  and 
long  postponed  question.  Is  there  a  wage  slavery?  That  the 
worker  is  not  independent,  that  he  has  to  work  hard,  and  that 
very  often  he  does  not  get  even  the  full  price  of  his  labor 
power,  but  has  often  to  work  on  half  wages ;  all  these  facts  are 
unchallengable.  But,  none  of  these  constitute  slavery.  De¬ 
pendence  is  not  slavery.  Children  are  always  dependent  in 
all  parts  of  the  world,  but  they  are  nowhere  regarded  as  slaves. 
All  civilization  implies  more  or  less  organization ;  all 
organization  implies  dependence.  A  person  who  identifies 
slavery  with  dependence  must,  to  be  consistent,  be  opposed 
to  all  forms  of  government,  all  forms  of  organized  society,  and 
all  civilization.  Hard  work  is  not  slavery.  In  the  savage  state 
hard  work  is  the  rule,  for  the  productivity  of  labor  is  so  low 
that  it  takes  a  full  day's  work  to  produce  the  merest  necessities 
of  life.  These  savages  are  not  slaves  no  matter  what  else  you 
call  them.  The  heroes  of  science  are  wearing  away  their  lives 
in  incessant  toil  but  they  are  not  slaves.  A  low  paid  worker 
may  be  rightly  called  a  slave  but  even  in  this  case  his  slavery 
is  not  wage  slavery.  His  work  may  be  divided  into  two  parts, 
one  part,  for  which  he  receives  wages  and  which  is  not  slav¬ 
ery,  and  the  other  part  for  which  he  receives  no  wages,  and 
which  is  no  doubt  slavery.  This  latter  part  of  work  he  gives 
free  as  the  price  of  a  temporary  escape  from  unemployment. 
His  real  slavery,  therefore,  is  the  unemployment  from  which 
he  is  trying  to  escape. 

200.  An  argument  very  much  in  favor  among  the  Social- 


LECTURE;  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


165 


ists  is  :  the  capitalist  ownership  of  the  means  of  production  con¬ 
stitute  the  slavery  of  the  workers.  “He  who  owns  that,  where¬ 
by  I  live  owns  me/’  Here  is  one  more  illustration  of  what  we 
find  so  abundantly  in  Socialist  literature,  good  rhetoric,  bad 
logic.  The  baker  owns  the  bread  whereby  I  live  but  he  does 
not  own  me ;  on  the  contrary  he  caters  like  a  slave  for  a  ten 
cent  piece,  though  his  life  nor  even  his  little  luxuries  would  be 
in  serious  peril  for  ten  cents.  The  druggist  owns  the  medicine 
and  the  doctor  owns  the  knowledge  of  the  medicine  whereby 
I  live,  but  the  druggist  and  the  doctor  are  more  obedient  to 
my  call  than  a  negro  slave  of  fifty  years  ago.  It  is  true  that  I 
own  some  money,  but  their  lives  are  not  half  as  dependent  on 
my  money,  as  mine  on  their  medicine.  If  there  is  any  economic 
slavery  anywhere  at  all,  and  the  fact  can  scarcely  be  doubted, 
the  cause  of  that  slavery  must  be  looked  for  somewhere  else. 
It  is  not  the  “ownership  of  that  whereby  I  live.” 

201.  Slavery  is  duty  without  right.  In  a  civilized  state 
unemployment  is  slavery  because  the  civilization  (i.  e.,  organ¬ 
ized  society,  with  a  government,  to  enforce  the  duty  of  the  in¬ 
dividual),  imposes  duties  without  giving  an  equivalent  right. 
What  we  call  wage  slavery  is  not  slavery  but  an  escape  from 
unemployment,  and  therefore  escape  from  slavery.  Hard  work 
and  other  disagreeable  features  of  this  form  of  escape  are  cer¬ 
tainly  not  to  be  denied,  but  all  these  evils  together,  do  not  pile 
up  near  as  high  as  the  single  evil  of  unemployment.  If  they 
did,  why,  any  person  could  at  any  moment  throw  up  his  job  and 
go  among  the  unemployed.  But,  no  person  seems  to  have  any 
preference  to  unemployment.  Hard  work,  bad  food,  bad  hous¬ 
ing,  occupational  risk,  separation  from  the  family,  humilation, 
anything,  even  immediate  27death  by  suicide,  seems  to  be  wel- 

27.  The  following  extract  from  the  Saturday  Evening  Post  i-s  one 
out  of  the  many  I  have  collected  in  the  course  of  my  studies  on  this 
subject: 

“But  the  tragedy  that  Bodie  will  never  forget  cost  a  single 
life — that  of  an  unknown  young  man.  The  Standard  Shaft  had  reach¬ 
ed  a  depth  of  one  thousand  feet  and  McGuire,  the  foreman,  was  stand¬ 
ing  beside  the  opening,  talking  with  a  friend,  when  a  young  man  came 
up  to  him.  McGuire  did  not  notice  the  stranger  at  first,  who  -stood 
a  few  feet  away,  whittling  a  stick  and  waiting  for  the  foreman  to 
speak  to  him.  Afterward  it  was  remembered  that  throughout  the 
short  conversation  the  young  man  had  not  raised  his  eyes,  but  had 


166 


the:  unemployment  problem. 


come  as  a  means  of  escape  from  unemployment.  Fifty  years 
ago  when  chattel  slavery  was  in  vogue  the  negro  slaves  tried 
to  escape  slavery  by  running  away.  They  faced  the  jungles, 
the  rattlesnakes,  the  diseases  of  the  swamps,  and  the  blood¬ 
hounds  all  to  escape  from  slavery.  Today  the  worker  accepts 
what  you  call  the  wage  slavery  as  a  means  of  escape  from  un¬ 
employment.  This  is  why  I  say  “wage  slavery”  is  not  slavery 
but  rather  an  escape  from  unemployment,  which  is  slavery 
(in  fact  one  of  the  worst  forms  of  slavery).  If  you  can  prove 
to  me  that  unemployment  is  not  slavery,  or  that  wage-work 
even  in  its  worst  form  is  not  an  escape  from  that  slavery,  try  it. 
I  am  open  to  conviction. 

202.  To  conclude.  The  doctrine  of  full  produce  has  no 
moral  justification  whatever.  It  is  impossible  to  apply  it  con¬ 
sistently  in  practice,  and  is  anti-social  as  far  as  it  can  be  ap¬ 
plied.  The  wage  system  is  the  only  just  and  equitable  method 
of  remuneration.  It  is  true  that  the  wage  system  as  it  is  today 
is  far  from  perfect  but  the  fault  is  not  fundamentally  in  the 
wage  system,  nor  in  capitalism,  which  introduced  that  system; 
it  is  entirely  the  result  of  unemployment  which  capitalism  has 
not  created,  and  which  capitalism  has  been  unable  to  cure. 
The  evils  incident  to  the  wage  system  are  the  evils  of  unem- 

looked' at  the  floor  or  the  shaft  or  the  stick  he  was  whittling.  ‘Well?, 
said  the  foreman.  ‘They  tell  me  you’re  the  bos-s,’  said  the  stranger. 
‘What  of  it?’  ‘Any  chance  for  a  job  today?’  ‘No  chance.’  The  young 
can  continued  to  whittle  at  the  stick.  Then,  after  a  pause:  ‘Well,  to¬ 
morrow,  maybe?’  ‘No.  Nothing  tomorrow.  Full  up.’  The  young  man 
stopped  whittling  and. did  not  speak  again.  He  stood  for  a  moment,  as 
though  thinking;  then  he  reached  out  and  jabbed  the  penknife  into  a 
scantling  and.  with  the  half-whittled  stick  still  in  his  hand,  deliberately 
jumped  into  the  shaft.  Before  the  knife  had  ceased  quivering  its  owner 
was  dead — a  battered,  unrecognizable  bundle  a  thousand  feet  deep  in 
the  earth.” 

This  case  is  highly  instructive.  The  Bodie  mine  was 
owned  by  the  workers;  they  owned  all  the  gold  they  produced.  They 
were  rolling  in  gold,  living  in  a  paradise — a  fool’s  paradise  of  course, 
for  -since  everybody  had  an  abundance  of  gold,  the  prices  of  all  things 
went  up  in  proportion.  A  penny  newspaper  cost  a  dime,  and  so  on. 
And  lastly, — and  this  is  the  most  important  point, — the  ownership  of 
the  means  of  production  by  the  workers  did  not  solve  the  unemploy¬ 
ment  problem  at  Bodie.  While  the  employed  workers  were  getting 
the  full  produce  of  their  labor,  the  unemployed  could  get  into  the  mine 
only  by  jumping  into  the  shaft. 


LECTURE  IV— CAPITALISM  AND  THE  WAGE  SYSTEM. 


167 

ployment  only  and  will  be  remedied  only  when  the  Guaran¬ 
teed  Employment  system  is  established  and  unemployment 
eliminated..  There  is  no  other  remedy  for  the  faults  of  the 
wage  system. 


“UNEMPLOYMENT  MUST  BE  DESTROYED.” 


SUPPLEMENTARY  NOTE. 

By  The  Sociology  Club. 

121-1.  In  paragraph  121  the  author  maintains  that  the 
solution  of  the  unemployment  problem  will  not  be  achieved 
by  the  shortened  workday,  but  rather,  by  an  effective  in¬ 
crease  of  the  work-day.  It  is  because  of  seeming  paradoxical 
nature  of  this  statement  at  first  sight  that  the  Club  deems 
this  further  elucidation  essential  to  a  better  understanding  of 
the  author's  position. 

121-2.  To  illustrate  the  point  we  may  suppose  that  40 
per  cent,  of  a  given  working  population  are  employed  in  pro¬ 
ducing  commodities  for  regular  consumption,  including  even, 
those  engaged  in  such  personal  service  occupations  as  the 
waiter,  valet  and  actor.  55  per  cent,  are  employed  in  develop¬ 
mental  industry,  among  which  may  be  mentioned  those  oc¬ 
cupations  having  to  do  with  the  creation  of  new  capital,  com¬ 
modities  and  services  intended  for  future  consumption ;  pur¬ 
suits  from  which  no  immediate  benefit  is  derived,  as  the  labors 
of  the  moving  picture  stars,  road  builders,  miners  and  experi¬ 
mental  workers,  and  the  remaining  5  per  cent,  are  entirely 
unemployed.  The  problem  as  thus  presented,  is  to  provide 
work  for  that  5  per  cent.  The  plan  of  the  labor  unions  which 
is  also  endorsed  by  the  Socialists,  is  to  cut  down  the  hours  of 
work  that  room  may  be  provided  for  the  unemployed. 

121-3.  There  is  but  one  objection  to  this  proposition: 
it  will  not  work.  Not  only  is  the  most  important  question  of 
where  the  extra  wages  are  to  come  from  ignored,  but  it  reverts 
itself  into  a  case  of  robbing  Peter  to  pay  Paul  and  never  pay¬ 
ing  him.  Continuing  our  supposition,  the  shortening  of  the 
work  day  would  require  45  per  cent  of  the  production  workers 
to  do  what  was  formerly  done  by  the  40  per  cent,  without 
a  corresponding  reduction  in  wages.  This  cuts  into  the  profits 
just  to  that  extent  and  necessitates  so  much  capital  being  with¬ 
drawn  from  the  fund  covering  developmental  industry,  hence 
instead  of  55  per  cent,  being  engaged  in  development  work, 
The  curtailing  of  profit  by  increasing  the  cost  of  production 


SUPPLEMENTARY  NOTE 


169 


5  per  cent,  decreases  the  funds  available  for  development  in 
proportion  and  therefore  throws  a  corresponding  number  of 
workers  in  the  latter  branch  of  industry  out  of  work,  which 
leaves  but  50  per  cent.,  whereas  before  there  were  55  per  cent, 
so  employed. 

121-4.  Reduction  of  the  hours  of  work  cannot  help  to 
solve  the  unemployment  problem.  The  proper,  and  scientific 
solution,  and  the  only  practical  solution  is  to  place  these 
5  per-  cent,  of  unemployed  as  extra  help  in  the  field  of 
development.  The  necessary  extra  wages  being  drawn  from 
the  increased  surplus  of  the  40  per  cent,  of  productive  workers, 
assuming  that  surplus  is  capable  of  being  increased.  And  if 
surplus  were  not  capable  of  being  increased,  a  solution  of  the 
unemployment  problem  would  be  impossible,  but  surplus  can 
increase  and  does  increase  so  the  unemployment  problem  is 
not  incapable  of  solution.  The  increase  of  surplus  mav  be 
further  accomolished  in  one  of  the  two  following  ways,  first; 
by  increase  of  the  hours  of  work,  second ;  by  improvement 
in  the  means  and  methods  of  work  without  a  corresponding 
reduction  of  the  word-day.  The  method  of  actual  prolongation 
is  undesirable  to  both  the  worker  and  the  capitalist ;  to  the 
worker  because  it  takes  it  out  of  his  life,  to  the  capitalist  be¬ 
cause  it  does  not  bring  in  the  maximum  amount  of  profit.  No 
capitalist  can  make  the  worker  work  more  than  24  hours  a  day. 
To  effective  prolongation  there  is  no  limit,  and  besides  it  does 
not  hurt  the  worker  in  any  way.  In  either  case  the  only  possible 
and  practicable  way  to  absoirb  all  the  unemployed  is  by  in¬ 
creasing  the  hours  of  work,  actual  or  effective,  which  will  in 
turn  increase  the  amount  of  surplus  with  which  to  pay  the 
wages  of  the  5  per  cent,  additional  workers  now  engaged  in 
development  work,  and  who  formerly  had  no  work  at  all. 

121-5.  From  the  foregoing  it  would  seem  clear  that  the 
shorter  work-day,  whatever  else  may  be  said  in  its  favor,  does 
not  incline  towards  a  solution  of  the  unemployment  problem. 

121-6.  Just  as  all  tricks  appear  simple  after  being  ex¬ 
posed  by  the  magician,  so  do  all  paradoxes  become  alight  with 
consistency  after  they  are  explained. 

121-7.  Undoubtedly  it  was  the  penetrating  wisdom  of 
Marx  who,  concluding  that  the  remedy  of  this  problem  was 


170 


SUPPLEMENTARY  NOTE 


to  be  found  in  an  effective  prolongation  of  the  work-day  was 
prompted  to  write  that  “the  most  fortunate  condition  for  wage 
labor  lies  in  the  speedy  increase  of  capital.” 

SOCIOLOGY  CLUB. 


NOTICE  TO  READERS 

Lecture  V. — “Capitalism  and  Profit  System"  is  in  progress 
and  will  be  published  shortly. 


A  word  to  readers : 

The  most  pointed  criticism  of  any  and  all  parts  of  the 
preceeding  lectures  is  cordially  invited  and  anxiously  awaited 
by  the  publishers.  Any  such  will  be  forwarded  to  the  author 
for  modification,  correction  or  explanation  of  his  views,  as  the 
case  may  be  and  will  be  incorporated  in  the  papers  containing 
the  lectures  that  are  to  follow.  Replies  to  the  questions,  how¬ 
ever,  will  be  sent  on  request  separately  to  those  who  send  them 
in. 

Respectfully, 

THE  SOCIOLOGY  CLUB, 

W.  S.  Van  Valkenburgh,  Secretary. 

331  Mohawk  Avenue, 

Scotia,  N.  Y. 


ERRATA 


Page  63,  paragraph  68,  line  8,  should  read,  “get  your  em¬ 
ployment  ?”  instead  of  “yet  your  employment.” 

Page  82,  paragraph  93,  line  10,  should  read,  “..rather  than 
escape,”  instead  of  “than  escape.” 

Page  108,  paragraph  125,  line  6,  should  read,  “a  partial 
solution”  instead  of  “a  practical  solution.” 

Page  111,  paragraph  130,  line  26,  should  read  “there  is 
not  a  day,”  instead  of  “ - not  a  day.” 


